Pandora Stock Climbs On News Of Major Layoffs
UPDATE 2: Pandora shared some positive news about both subscribers and earnings late on Thursday, after a week in which investors shaved tens of millions of dollars off it valuation. As of mid-afternoon Friday, Pandora stock was up almost 7%, the same percentage of staff who will be getting pink slips this quarter.
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After a tough week on Wall Street, Pandora (NYSE: P) announced late Thursday that it expects to exceed previously announced Q4 2016 revenue and adjusted EBITDA guidance ranges thanks to stronger ad sales and new subscribers to Pandora Plus which has surpassed 4.3 million in paid subscribers.
After making direct deals with many labels and music publishers, in later September Pandora replaced its Pandora One paid service with Pandora Plus, adding features. By the end of December, Plus had added 375,000 net new subscribers.
7% Staff Cuts Announced
In a cost cutting move, Pandora said that it U.S. employee base (excluding Ticketfly and ANZ) by approximately 7% by the end of Q1 2017. Additionally, the company is leveraging its analytics platform and ad insertion logic to drive additional revenue and realize leverage in content costs.
“2016 was a year of significant investment for Pandora. In 2017, we will manage the business toward full year adjusted EBITDA profitability,” said CEO Tim Westergren in a statement. “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.”
MORE: Pandora Loses $150M Value As Stock Drops Again
