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Pandora Soars as Revenue Jumps 54%, CEO to Step Down (Update 1)

Updated from 4:34 p.m. EST to include information on CEO stepping down in the ninth paragraph.

NEW YORK (TheStreet) -- Shares of Pandora Media (P) rose sharply after the company beat Wall Street estimates, led by a huge jump in revenue.

The Internet radio company posted a non-GAAP loss of 4 cents a share on $125.1 million in revenue for its fiscal fourth quarter. Revenue rose 54% compared to the prior year's quarter, with advertising revenue climbing 51% year-over-year to $109 million. Subscription and other revenue jumped 74% during the same timeframe to $16.1 million.

Analysts surveyed by Thomson Reuters were looking for a loss of 5 cents a share on $122.81 million in revenue.

"We continue to monetize mobile at record levels and exceeded our expectations for the quarter," stated Joe Kennedy, Chairman & CEO of Pandora. "We closed the year with a record 8% share of total U.S. radio listening and record mobile monetization that cemented our leadership in mobile advertising. We have completed our technology integration with radio ad buying platforms and are rolling it out to the market."

"Pandora has been hiring top talent in local radio markets to further increase our share of the $15 billion radio ad market," he added. "We are now effectively the largest radio station in almost every major market and begin fiscal year 2014 with extraordinary momentum."

In a separate release, Pandora noted that February listening hours were 1.38 billion, up 42% year-over-year, as it increased market share. At the end of February, Pandora had 67.7 million active users, up 37% year-over-year, taking 8.48% of the total U.S. radio listening market.

Pandora provided fiscal first-quarter 2014 and full-year guidance that was ahead of Wall Street estimates. The company expects to lose, on a non-GAAP basis, 10 cents to 13 cents a share, but revenue is expected to be between $120 million and $125 million in the first quarter. Analysts surveyed by Thomson Reuters expect a loss of 10 cents on $119.53 million.

For fiscal year 2014, Pandora expects earnings to be between a loss of 5 cents and a gain of 5 cents, with revenue between $600 million and $620 million. Analysts polled by Thomson Reuters expect a loss of 2 cents on $600.01 million in sales.

Pandora also announced that Chairman and CEO Joe Kennedy would be stepping down, but would remain CEO until a successor is found. "As I near the start of my tenth year at the helm of Pandora, I am incredibly proud of the team and what we have accomplished in redefining radio," Kennedy said in the press release. "As part of our Board discussions of the road that lies ahead, I reached the conclusion and advised the Board that the time is right to begin a process to identify my successor. There is a tremendous market opportunity ahead and I look forward to continuing to work with all the great people at Pandora to keep driving the business forward."

Shares of Pandora closed the regular session higher, up 0.51% to $11.73. The stock is moving sharply higher in extended-hours trading, up 20.38% to $14.12, according to Nasdaq.com.

--Written by Chris Ciaccia in New York

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