Pandora Rallies as Results Top Estimates, 7% Cut in Jobs SetBy
Some 375,000 new subscribers to Pandora Plus in quarter
Radio pioneer introducing news services as part of overhaul
Pandora Media Inc., the world’s largest online radio service, rose in early trading after it said fourth-quarter results exceeded its forecast on strong ad sales and new paid subscribers. The company is also eliminating jobs to boost efficiency.
Shares of Pandora gained 9.1 percent to $13.09 at 6:59 a.m. in New York Friday. The stock climbed 0.9 percent to $12 at the close Thursday and declined 2.8 percent for all of 2016.
Pandora Plus signed about 375,000 new subscribers in the period, bringing total paid users to 4.3 million, the Oakland, California-based company said in a statement of preliminary results Thursday. The ad-free offering, which lets users skip more songs, made its debut in September. The company also plans to roll out an on-demand service akin to Spotify and Apple Music in the coming weeks.
Hampered by a decline in active users and the rise of competitive services, Pandora is introducing new subscription services as part of a broader overhaul. Co-founder Tim Westergren returned as chief executive officer last March and has since shuffled a few top leadership positions.
In October, Pandora forecast fourth-quarter revenue of $362 million to $374 million and an adjusted loss of $39 million to $51 million before interest, taxes, depreciation and amortization. The company will announce complete results on Feb. 9.
The job cuts will amount to about 7 percent of staff, excluding the concert-ticketing business Ticketfly, Pandora said. The company had about 2,200 employees at the end of 2015.
“While making workforce reductions is always a difficult decision, the commitment to cost discipline will allow us to invest more heavily in product development and monetization and build on the foundations of our strategic investments,” Westergren said in the statement.