Pandora Cuts Jobs, Projects Strong Fourth Quarter -- 2nd Update

By Josh Beckerman 

Pandora Media Inc. will reduce its U.S. employee base, excluding Ticketfly, by about 7% by the end of the first quarter, as part of a commitment to cost discipline.

Pandora said its revenue for the quarter ended Dec. 31 will be above its guidance amid strong advertising performance. In October, Pandora lowered its 2016 revenue guidance and projected revenue between $362 million and $374 million for the quarter.

In after-hours trading, Pandora shares rose 7.75% to $12.93.

The ad-free Pandora Plus tier, which debuted in September and charges $5 monthly, generated more than 375,000 net new subscribers by the end of December. Over all, Pandora now has more than 4.3 million paid subscribers.

Pandora Premium, set to launch during the first quarter, will give subscribers unlimited access to tens of millions of tracks, much like Spotify AB, and Apple Inc.'s Apple Music.

Pandora Plus marked the company's first offering using direct music licensing from the major record companies. Pandora's main radio service uses compulsory government licenses, which allow online broadcasters to pay rates determined by federal copyright judges as long as listeners don't get to pick specific songs or the order in which they play.

Pandora also said results will be better than expected for its adjusted loss before interest, taxes, depreciation and amortization, which was projected between $39 million to $51 million.

Pandora expects costs of $4 million to $6 million for the job cuts, mostly in the first quarter.

In November, Pandora said it was seeking a full-time chief financial officer to report to Mike Herring, who serves as both president and CFO. Last month, Sara Clemens resigned as chief operating officer.

--Hanna Karp contributed to this article.

Write to Josh Beckerman at [e-mail]

(END) Dow Jones Newswires

January 12, 2017 20:37 ET (01:37 GMT)

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