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PANDORA REVENUE UP 6% IN 2017

Pandora’s revenue hit $1.47 billion in 2017, a 6% year-over-year increase that beat analysts expectations. By eliminating revenue from Australia, New Zealand and Ticketfly, which the company sold in September, revenue was up 8% to $1.39b, more than $1b of which came in from ad sales.

In announcing the results, the company’s executives were bullish on the fourth quarter results and initiatives put in place in the last three months of 2017.

Q4 total revenue was $395.3 million, a 7% year-over-year spike, owing to a 65% year-over-year increase in subscription revenue. In the fourth quarter, Pandora added approximately 300k subscribers, bringing the total to 5.48m.

Q4 advertising revenue was better than expected as a greater portion of ad buys were made later than usual in the cycle. Content costs, most of which is recorded music, represented approximately 55% of revenue in the fourth quarter.

And Pandora listening on voice-activated devices was up 145% year-over-year, the result of the company entering numerous device partnerships.

“These are important because they enable our full suite of ad-supported and subscription services, as well as Premium Access in the future, on all the 125 devices consumers care about,” Pandora CEO Roger Lynch said. “This is a critical part of our plan to grow, and these announcements are a taste of what we expect will be many more during 2018.”

Later this quarter, the company will start marketing its Premium Access service.

“Early results are encouraging,” Lynch said. “We’re seeing higher repeat sessions among Premium Access users, more use of Premium Access by younger users, and better conversions to our Pandora Premium subscription product, especially by younger listeners.”

For the year, the company’s net loss was $518.4 million compared to a net loss of $343m in 2016. The loss on adjusted EBITDA was $125m.

The results sparked a flurry of after-hours trading and in pre-market trading this morning, the stock was up nearly 5% to $5.10 a share.

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