Pandora Media Falls Over 20% On Disappointing Q4 And 2015 Outlook

Pandora Media Inc P announced financial results Thursday for the fourth quarter ended December 31, 2014.

Total revenue was $268.0 million, a 33 percent year-over-year increase on a non-GAAP basis, however, it was below expectations of $276.53 million.

Advertising revenue was $220.1 million, a 36 percent year-over-year increase. Subscription and other revenue was $47.9 million, a 24 percent year-over-year increase on a non-GAAP basis.

Non-GAAP diluted EPS was $0.18, below expectations of $0.19 and excluded $26.9 million in expense from stock-based compensation and $0.2 million in amortization of intangible assets. The GAAP basic and diluted EPS was $0.06.

Adjusted EBITDA was $43.8 million, a 68 percent  year-over-year increase. Adjusted EBITDA excludes $26.9 million in expense from stock-based compensation, $4.2 million of depreciation and amortization expense, $0.4 million of provision for income taxes and $0.1 million of other income.

Active listeners were 81.5 million at the end of the fourth quarter of 2014, an increase of 7 percent from 76.2 million from the same period last year.

“We end 2014 in a very good position, with stronger relationships across the music community, record monetization metrics and highly engaged users,” stated Brian McAndrews Chairman, President and CEO of Pandora.

Revenue for the first quarter of 2015 is expected to be in the range of $220 million to $225 million, below estimates of $243.58 million.

Adjusted EBITDA for the first quarter of 2015 is expected to be a loss in the range of $35 million and $30 million. Adjusted EBITDA excludes forecasted stock-based compensation expense of approximately $25 million and forecasted depreciation and amortization expense of approximately $5 million and assumes minimal provision for income taxes given our net loss position.

For the full year of 2015, revenue is expected to be in the range of $1.15 billion to $1.17 billion, below expectations of $1.21 billion. Adjusted EBITDA is expected to be an income in the range of $70 million to $80 million.

Pandora Media Inc traded at $14.13 in the after hours session, down 23.25 percent.