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Pandora Earnings Disappoint, Stock Plunges, $439M Paid To Rightsholders In 2014

image from media.corporate-ir.netUPDATE:  After falling as much as 26%, Pandora stock rose slightly in after hours trading, settling at $14.90, still down almost 20%.

Pandora stock fell on news that the music streamer's earnings missed Wall Street expectations and the company's own guidance. Pandora's revenue and listener growth both slowed somewhat, but for the first time surpassed 1 billion song streams per day on select days, grabbing an impressive 79.2% of the overall internet radio market. Another big number shared in the earnings report: Pandora reported that it has paid a total of $1.2 billion to rightsholders including $439 million in 2014.

Highlights:

  • Q4 2014 total mobile revenue was $209.5 million, growing 43% year-over-year on a GAAP and non-GAAP basis, now 78% of total revenue
  • Full year 2014 total GAAP and non-GAAP mobile revenue was $712.0 million and $699.1 million, growing 58% and 52%, now 77% of total GAAP and non-GAAP revenue
  • Q4 2014 local advertising revenue was $49.9 million, growing 90% year-over-year
  • Full year 2014 local advertising revenue was $152.9 million, growing 155% year-over-year
  • Mobile monetization reached record highs across all dimensions of Pandora’s business
  • Year-end 2014 active listeners were a record 81.5 million, growing 7% year-over-year
  • Full year 2014 total listener hours were 20.03 billion, growing 20% year-over-year

During the earnings call, Pandora executives promoted the potential of such a large set of data for both artists and brands.  While direct deals with rightsholders were mentioned along with a "strong royalty proposal to the Copyright Royalty Board," no mention was made of several looming lawsuits and growing pro-artist sentiment in Washington D.C. that could mean higher royalty bills for Pandora in the future. 

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