[February 21, 2018] |
|
Pandora Reports Q4 2017 Financial Results
Pandora (NYSE: P) today announced financial results for the fourth
quarter and full year ended December 31, 2017.
"Digital audio is on the verge of massive growth - music consumption is
increasing, podcasts are gaining popularity and voice-activated devices
are quickly becoming mainstream. Just like video, audio is transitioning
from a one-to-many broadcast experience to a one-to-one model with
personalization at the core. Pandora's scale, listener engagement and
data position us well to capitalize on these trends," said Roger Lynch,
CEO of Pandora. "From launching on-demand for our ad-supported listeners
to expanding multiple device partnerships in the last quarter alone,
we're building a strong foundation for audience growth and improved
monetization. These efforts will enable us to strengthen business
fundamentals and reinvigorate Pandora in 2018."
Fourth Quarter 2017 Financial Results & Highlights
Premium Access: Pandora successfully launched Premium Access,
which allows ad-supported listeners access to on-demand experiences
including, for the first time, the ability to search, play and share
songs, albums and playlists by viewing a short video ad. Premium Access
also unlocks new rewards-based video inventory for advertisers.
Revenue: For the fourth quarter of 2017, total consolidated
revenue was $395.3 million, an approximate 7% year-over-year increase
compared to the year-ago quarter, excluding Australia, New Zealand and
Ticketfly. This included $297.7 million in advertising revenue and $97.7
million in subscription revenue. Revenue in the year-ago quarter,
excluding Australia, New Zealand and Ticketfly was $370.5 million. We
discontinued our service in Australia and New Zealand on July 31, 2017
and Ticketfly was sold to Eventbrite on September 1, 2017. Including
Australia, New Zealand and Ticketfly, total consolidated revenue for the
fourth quarter of 2016 was $392.6 million.
GAAP Net Loss and Adjusted EBITDA: For the fourth quarter of
2017, GAAP net loss was $44.7 million compared to a net loss of $90.0
million in the same quarter last year. Adjusted EBITDA was $5.8 million,
compared to a loss of $30.4 million in the same quarter last year.
Cash and Investments: For the fourth quarter of 2017, the Company
ended with $500.8 million in cash and investments, compared to $499.4
million at the end of the prior quarter.
Partnerships: Expanded partnerships across Sonos, Comcast's
Xfinity X1, Android TV and Amazon Fire TV in the fourth quarter.
Listener Hours: Total listener hours were 5.03 billion for the
fourth quarter of 2017, compared to 5.38 billion for the same period of
the prior year.
Active Listeners: Active listeners were 74.7 million at the end
of the fourth quarter of 2017.
Subscribers: Pandora Plus and Pandora Premium subscribers were
5.48 million at the end of the fourth quarter.
Full Year 2017 Financial Results
Revenue: For the full year 2017, consolidated total revenue was
$1.467 billion, a 6% year-over-year increase. This included ticketing
revenue of $76.0 million from the period. Our ticketing service was sold
to Eventbrite on September 1, 2017. Excluding revenue from Australia,
New Zealand and Ticketfly, full year 2017 revenue was $1.385 billion, an
8% year-over-year increase. This included advertising revenue of $1.071
billion and subscription and other revenue of $314.3 million.
GAAP Net Loss and Adjusted EBITDA: For the full year of 2017,
GAAP net loss was $518.4 million compared to a net loss of $343.0
million in the year ago period. Adjusted EBITDA was a loss of $125.0
million compared to a loss of $119.5 million last year.
Recent Events & Other Information
Strategic Realignment: Pandora recently announced an
organizational restructuring designed to prioritize its strategic growth
initiatives and optimize overall business performance. A combination of
eliminated roles and other measures are expected to result in combined
annualized savings of approximately $45 million to adjusted EBITDA. The
savings will be reinvested into growth initiatives including ad-tech,
non-music content, device integration and marketing technology, toward
which the company will redeploy existing employees and hire for new
positions.
Guidance: Guidance will be discussed during the fourth quarter
and full year 2017 conference call.
Fourth Quarter and Full Year 2017 Financial Results Conference Call:
Pandora will host a conference call today at 2 p.m. PT/5 p.m. ET to
discuss fourth quarter and full year 2017 financial results with the
investment community. A live webcast of the event will be available on
the Pandora Investor Relations website at http://investor.pandora.com.
A live domestic dial-in is available at (877) 355-0067 or (614) 999-7532
internationally. A domestic replay will be available at (855) 859-2056
or (404) 537-3406 internationally, using passcode 3687488, and
available via webcast replay until March 14, 2018.
ABOUT PANDORA
Pandora is the world's most powerful music discovery platform-a place
where artists find their fans and listeners find music they love. We are
driven by a single purpose: unleashing the infinite power of music by
connecting artists and fans, whether through earbuds, car speakers, or
anywhere fans want to experience it. Our team of highly trained
musicologists analyze hundreds of attributes for each recording which
powers our proprietary Music Genome Project®, delivering billions of
hours of personalized music tailored to the tastes of each music
listener, full of discovery, making artist/fan connections at
unprecedented scale. Founded by musicians, Pandora empowers artists with
valuable data and tools to help grow their careers and connect with
their fans.
www.pandora.com
@pandoramusic | www.pandoraforbrands.com|
@PandoraBrands | amp.pandora.com
"Safe harbor" Statement: This press release contains
forward-looking statements within the meaning established by the Private
Securities Litigation Reform Act of 1995, including, but not limited to,
statements regarding expected revenue and adjusted EBITDA. These
forward-looking statements are based on Pandora's current assumptions,
expectations and beliefs and involve substantial risks and uncertainties
that may cause results, performance or achievement to materially differ
from those expressed or implied by these forward-looking statements.
Factors that could cause or contribute to such differences include, but
are not limited to: our operation in an emerging market and our
relatively new and evolving business model; our ability to estimate
revenue reserves; our ability to increase our listener base and listener
hours; our ability to attract and retain advertisers; our ability to
generate additional revenue on a cost-effective basis; competitive
factors; our ability to continue operating under existing laws and
licensing regimes; our ability to enter into and maintain commercially
viable direct licenses with record labels for the right to reproduce and
publicly perform sound recordings on our service; our ability to
establish and maintain relationships with makers of mobile devices,
consumer electronic products and automobiles; our ability to manage our
growth and geographic expansion; our ability to continue to innovate and
keep pace with changes in technology and our competitors; our ability to
expand our operations to delivery of non-music content; our ability to
protect our intellectual property; risks related to service
interruptions or security breaches; and general economic conditions
worldwide. Further information on these factors and other risks that may
affect the business are included in filings with the Securities and
Exchange Commission (SEC) from time to time, including under the heading
"Risk Factors" in our most recent reports on Form 10-K and Form 10-Q.
The financial information contained in this press release should be read
in conjunction with the consolidated financial statements and notes
thereto included in our most recent reports on Form 10-K and Form 10-Q,
each as they may be amended from time to time. Our results of operations
for the current period are not necessarily indicative of our operating
results for any future periods.
These documents are available online from the SEC or on the SEC Filings
section of the Investor Relations section of our website at
investor.pandora.com. Information on our website is not part of this
release. All forward-looking statements in this press release are based
on information currently available to the Company, which assumes no
obligation to update these forward-looking statements in light of new
information or future events.
Non-GAAP Financial Measures: To supplement our condensed
consolidated financial statements, which are prepared and presented in
accordance with accounting principles generally accepted in the United
States ("GAAP"), the Company uses the following non-GAAP measures of
financial performance: non-GAAP gross profit, non-GAAP net loss,
non-GAAP basic and diluted net loss per common share, adjusted EBITDA,
non-GAAP product development, non-GAAP sales and marketing and non-GAAP
general and administrative. The presentation of this additional
financial information is not intended to be considered in isolation
from, as a substitute for, or superior to, the financial information
prepared and presented in accordance with GAAP. These non-GAAP measures
have limitations in that they do not reflect all of the amounts
associated with our results of operations as determined in accordance
with GAAP. In addition, these non-GAAP financial measures may be
different from the non-GAAP financial measures used by other companies.
These non-GAAP measures should only be used to evaluate our results of
operations in conjunction with the corresponding GAAP measures.
Management compensates for these limitations by reconciling these
non-GAAP financial measures to the most comparable GAAP financial
measures within our earnings releases.
Non-GAAP gross profit, non-GAAP net loss, non-GAAP basic and diluted net
loss per common share, non-GAAP product development, non-GAAP sales and
marketing and non-GAAP general and administrative differ from GAAP in
that they exclude stock-based compensation expense, intangible
amortization expense, amortization of non-recoupable ticketing contract
advances, goodwill impairment, contract termination fees, expense
associated with the restructurings and loss on sales of subsidiaries.
The income tax effects of non-GAAP pre-tax loss have been reflected in
non-GAAP net loss and non-GAAP basic and diluted net loss per common
share.
Adjusted EBITDA: Adjusted EBITDA excludes stock-based
compensation expense, benefit from (provision for) income taxes,
depreciation and intangible amortization expense, amortization of
non-recoupable ticketing contract advances, other expense, expense
associated with the restructurings, goodwill impairment, contract
termination fees and loss on sales of subsidiaries.
Stock-based Compensation Expense: consists of expenses for stock
options, restricted stock units and other awards under our equity
incentive plans. Stock-based compensation is included in the following
cost and expense line items of our GAAP presentation: cost of
revenue-other, cost of revenue-ticketing service, product development,
sales and marketing and general and administrative.
Although stock-based compensation is an expense for the Company and is
viewed as a form of compensation, management excludes stock-based
compensation from our non-GAAP measures and adjusted EBITDA results for
purposes of evaluating our continuing operating performance primarily
because it is a non-cash expense not believed by management to be
reflective of our core business, ongoing operating results or future
outlook. In addition, the value of stock-based instruments is determined
using formulas that incorporate variables, such as market volatility,
that are beyond our control.
Benefit from (Provision for) Income Taxes: consists of expense
recognized related to U.S. and foreign income taxes. The Company
considers its adjusted EBITDA results without these charges when
evaluating its ongoing performance because it is not believed by
management to be reflective of our core business, ongoing operating
results or future outlook.
Depreciation and Intangible Amortization Expense: consists of
non-cash charges that can be affected by the timing and magnitude of
business combinations and asset purchases. Depreciation and intangible
amortization expense is included in the following cost and expense line
items of our GAAP presentation: cost of revenue-other, cost of
revenue-ticketing service, product development, sales and marketing and
general and administrative. Depreciation and intangible amortization
expense also consists of non-cash amortization of non-recoupable amounts
paid in advance to the Company's clients pursuant to ticketing
agreements. Amortization of non-recoupable ticketing contract advances
is included in the sales and marketing line of our GAAP presentation.
Management considers its operating results without intangible
amortization expense and amortization of non-recoupable ticketing
contract advances when evaluating its ongoing non-GAAP performance and
without depreciation, intangible amortization expense and amortization
of non-recoupable ticketing contract advances when evaluating its
ongoing adjusted EBITDA performance because these charges are non-cash
expenses that can be affected by the timing and magnitude of business
combinations, asset purchases and new client agreements and may not be
reflective of our core business, ongoing operating results or future
outlook.
Other Expense: consists primarily of interest expense related to
our Convertible Senior Notes and our Credit Facility. The Company
considers its adjusted EBITDA results without these charges when
evaluating its ongoing performance because it is not believed by
management to be reflective of our core business, ongoing operating
results or future outlook.
Expense Associated with the Restructurings: consists of
employee-related expense recognized in connection with the workforce
reduction in the first quarter of 2017 and the restructuring in
Australia and New Zealand. These costs are included in the following
cost and expense line items of our GAAP presentation: cost of
revenue-other, product development, sales and marketing and general and
administrative. This also consists of professional fees recognized in
connection with the reorganization of the Company in the fourth quarter
of 2017, which are included in the general and administrative line item
of our GAAP presentation. The Company considers its non-GAAP and
adjusted EBITDA results without these charges when evaluating its
ongoing performance because these charges are not believed by management
to be reflective of our core business, ongoing operating results or
future outlook.
Goodwill Impairment: consists of impairment charges primarily
related to the Ticketfly disposition. The impairment charge was
calculated as the excess of the carrying amount of the Ticketfly segment
over the agreed-upon purchase price less costs to sell. The Company
considers its operating results without these charges when evaluating
its ongoing non-GAAP and adjusted EBITDA results because these charges
are not believed by management to be reflective of our core business,
ongoing operating results or future outlook.
Contract Termination Fees: consists of termination and legal fees
and benefits incurred in connection with the termination of the
contractual commitment to sell redeemable convertible preferred stock to
KKR Classic Investors L.P. The Company considers its operating results
without these charges when evaluating its ongoing non-GAAP and adjusted
EBITDA results because these charges are not believed by management to
be reflective of our core business, ongoing operating results or future
outlook.
Loss on Sales of Subsidiaries: consists of loss on sales of
subsidiaries recognized during the period, primarily related to the
Ticketfly disposition. This amount was calculated as the decrease in the
fair value less costs to sell for sales of our subsidiaries and was
recorded as a loss on sale during the period. The Company considers its
operating results without these charges when evaluating its ongoing
non-GAAP and adjusted EBITDA results because these charges are not
believed by management to be reflective of our core business, ongoing
operating results or future outlook.
Income Tax Effects of Non-GAAP Pre-tax Loss: The Company adjusts
non-GAAP pre-tax net loss by considering the income tax effects of its
non-GAAP adjustments. The Company is currently forecasting a non-GAAP
effective tax rate of approximately 22% to 25% cumulatively for each
quarter and the full year 2018. However, the Company is not expected to
incur any material cash taxes due to its net operating loss position.
Management believes these non-GAAP financial measures and adjusted
EBITDA serve as useful metrics for our management and investors because
they enable a better understanding of the long-term performance of our
core business and facilitate comparisons of our operating results over
multiple periods and to those of peer companies, and when taken together
with the corresponding GAAP financial measures and our reconciliations,
enhance investors' overall understanding of our current financial
performance.
In the financial tables below, the Company provides a reconciliation of
the most comparable GAAP financial measure to the historical non-GAAP
financial measures used in this earnings release.
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|
|
|
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|
|
Pandora Media, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31,
|
|
Year ended December 31,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Revenue
|
|
|
|
|
|
|
|
|
Advertising
|
|
$
|
313,340
|
|
|
$
|
297,674
|
|
|
$
|
1,072,490
|
|
|
$1,074,927
|
|
Subscription and other
|
|
|
59,829
|
|
|
|
97,661
|
|
|
|
225,786
|
|
|
315,853
|
|
Ticketing service
|
|
|
19,429
|
|
|
|
-
|
|
|
|
86,550
|
|
|
76,032
|
|
Total revenue
|
|
|
392,598
|
|
|
|
395,335
|
|
|
|
1,384,826
|
|
|
1,466,812
|
|
Cost of revenue
|
|
|
|
|
|
|
|
|
Cost of revenue-Content acquisition costs
|
|
|
212,122
|
|
|
|
216,515
|
|
|
|
734,353
|
|
|
804,032
|
|
Cost of revenue-Other (1)
|
|
|
30,520
|
|
|
|
32,379
|
|
|
|
102,717
|
|
|
112,638
|
|
Cost of revenue-Ticketing service (1)
|
|
|
14,057
|
|
|
|
-
|
|
|
|
59,280
|
|
|
50,397
|
|
Total cost of revenue
|
|
|
256,699
|
|
|
|
248,894
|
|
|
|
896,350
|
|
|
967,067
|
|
Gross profit
|
|
|
135,899
|
|
|
|
146,441
|
|
|
|
488,476
|
|
|
499,745
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
Product development (1)
|
|
|
37,976
|
|
|
|
34,035
|
|
|
|
140,707
|
|
|
154,325
|
|
Sales and marketing (1)
|
|
|
133,251
|
|
|
|
113,961
|
|
|
|
490,364
|
|
|
492,542
|
|
General and administrative (1)
|
|
|
46,971
|
|
|
|
40,061
|
|
|
|
176,164
|
|
|
190,711
|
|
Goodwill impairment
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
131,997
|
|
Contract termination fees
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
23,044
|
|
Total operating expenses
|
|
|
218,198
|
|
|
|
188,057
|
|
|
|
807,235
|
|
|
992,619
|
|
Loss from operations
|
|
|
(82,299
|
)
|
|
|
(41,616
|
)
|
|
|
(318,759
|
)
|
|
(492,874
|
)
|
Interest expense
|
|
|
(7,228
|
)
|
|
|
(6,958
|
)
|
|
|
(26,144
|
)
|
|
(29,335
|
)
|
Other income, net
|
|
|
1
|
|
|
|
2,158
|
|
|
|
1,697
|
|
|
3,024
|
|
Total other expense, net
|
|
|
(7,227
|
)
|
|
|
(4,800
|
)
|
|
|
(24,447
|
)
|
|
(26,311
|
)
|
Loss before (provision for) benefit from income taxes
|
|
|
(89,526
|
)
|
|
|
(46,416
|
)
|
|
|
(343,206
|
)
|
|
(519,185
|
)
|
(Provision for) benefit from income taxes
|
|
|
(483
|
)
|
|
|
1,667
|
|
|
|
228
|
|
|
790
|
|
Net loss
|
|
$
|
(90,009
|
)
|
|
$
|
(44,749
|
)
|
|
$
|
(342,978
|
)
|
|
$(518,395
|
)
|
Net loss available to common stockholders
|
|
$
|
(90,009
|
)
|
|
$
|
(52,068
|
)
|
|
$
|
(342,978
|
)
|
|
$(558,561
|
)
|
Basic and diluted net loss per common share
|
|
$
|
(0.38
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(1.49
|
)
|
|
$(2.29
|
)
|
Weighted-average basic and diluted common shares
|
|
|
234,173
|
|
|
|
249,746
|
|
|
|
230,693
|
|
|
243,637
|
|
|
|
|
|
|
|
|
(1) Includes stock-based compensation expense as follows:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter ended December 31,
|
|
Year ended December 31,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Cost of revenue-Other
|
|
$
|
1,549
|
|
|
$
|
817
|
|
|
$
|
6,108
|
|
|
$
|
3,249
|
|
Cost of revenue-Ticketing service
|
|
|
34
|
|
|
|
-
|
|
|
|
188
|
|
|
|
69
|
|
Product development
|
|
|
7,884
|
|
|
|
7,478
|
|
|
|
30,975
|
|
|
|
33,243
|
|
Sales and marketing
|
|
|
14,445
|
|
|
|
13,459
|
|
|
|
58,118
|
|
|
|
56,116
|
|
General and administrative
|
|
|
10,705
|
|
|
|
8,350
|
|
|
|
43,069
|
|
|
|
35,754
|
|
Total stock-based compensation expense
|
|
$
|
34,617
|
|
|
$
|
30,104
|
|
|
$
|
138,458
|
|
|
$
|
128,431
|
|
|
|
|
Pandora Media, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
|
|
|
|
|
|
As of December 31,
|
|
|
2016
|
|
2017
|
Assets
|
|
|
|
|
Current assets
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
199,944
|
|
|
$
|
499,597
|
|
Short-term investments
|
|
37,109
|
|
|
1,250
|
|
Accounts receivable, net
|
|
309,267
|
|
|
336,429
|
|
Prepaid content acquisition costs
|
|
46,310
|
|
|
55,668
|
|
Prepaid expenses and other current assets
|
|
33,191
|
|
|
19,220
|
|
Total current assets
|
|
625,821
|
|
|
912,164
|
|
Convertible promissory note receivable
|
|
-
|
|
|
35,471
|
|
Long-term investments
|
|
6,252
|
|
|
-
|
|
Property and equipment, net
|
|
124,088
|
|
|
116,742
|
|
Goodwill
|
|
306,691
|
|
|
71,243
|
|
Intangible assets, net
|
|
90,425
|
|
|
19,409
|
|
Other long-term assets
|
|
31,533
|
|
|
11,293
|
|
Total assets
|
|
$
|
1,184,810
|
|
|
$
|
1,166,322
|
|
Liabilities, redeemable convertible preferred stock and
stockholders' equity
|
|
|
|
|
Current liabilities
|
|
|
|
|
Accounts payable
|
|
$
|
15,224
|
|
|
$
|
14,896
|
|
Accrued liabilities
|
|
35,465
|
|
|
34,535
|
|
Accrued content acquisition costs
|
|
93,723
|
|
|
97,751
|
|
Accrued compensation
|
|
60,353
|
|
|
47,635
|
|
Deferred revenue
|
|
28,359
|
|
|
31,464
|
|
Other current liabilities
|
|
20,993
|
|
|
-
|
|
Total current liabilities
|
|
254,117
|
|
|
226,281
|
|
Long-term debt, net
|
|
342,247
|
|
|
273,014
|
|
Other long-term liabilities
|
|
34,187
|
|
|
23,500
|
|
Total liabilities
|
|
630,551
|
|
|
522,795
|
|
Redeemable convertible preferred stock
|
|
-
|
|
|
490,849
|
|
Stockholders' equity
|
|
|
|
|
Common stock
|
|
24
|
|
|
25
|
|
Additional paid-in capital
|
|
1,264,693
|
|
|
1,422,221
|
|
Accumulated deficit
|
|
(709,636
|
)
|
|
(1,269,351
|
)
|
Accumulated other comprehensive loss
|
|
(822
|
)
|
|
(217
|
)
|
Total stockholders' equity
|
|
554,259
|
|
|
152,678
|
|
Total liabilities, redeemable convertible preferred stock and
stockholders' equity
|
|
$
|
1,184,810
|
|
|
$
|
1,166,322
|
|
|
|
|
|
|
Pandora Media, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands) (unaudited)
|
|
|
|
|
|
|
|
Quarter ended December 31,
|
|
Year ended December 31,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Operating activities
|
|
|
|
|
|
|
|
|
Net loss
|
|
$
|
(90,009
|
)
|
|
$
|
(44,749
|
)
|
|
$
|
(342,978
|
)
|
|
$
|
(518,395
|
)
|
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities
|
|
|
|
|
|
|
|
|
Goodwill impairment
|
|
-
|
|
|
-
|
|
|
-
|
|
|
131,997
|
|
(Gain) loss on sales of subsidiaries
|
|
-
|
|
|
(81
|
)
|
|
-
|
|
|
9,378
|
|
Depreciation and amortization
|
|
17,277
|
|
|
13,827
|
|
|
60,757
|
|
|
62,948
|
|
Stock-based compensation
|
|
34,617
|
|
|
30,104
|
|
|
138,458
|
|
|
128,431
|
|
Amortization of premium on investments, net
|
|
66
|
|
|
3
|
|
|
405
|
|
|
81
|
|
Accretion of discount on convertible promissory note receivable
|
|
-
|
|
|
(516
|
)
|
|
-
|
|
|
(687
|
)
|
Other operating activities
|
|
612
|
|
|
157
|
|
|
881
|
|
|
447
|
|
Amortization of debt discount
|
|
4,728
|
|
|
5,219
|
|
|
18,315
|
|
|
20,153
|
|
Interest income
|
|
-
|
|
|
(823
|
)
|
|
-
|
|
|
(1,081
|
)
|
Provision for bad debt
|
|
907
|
|
|
1,360
|
|
|
3,522
|
|
|
12,211
|
|
Changes in restricted cash
|
|
-
|
|
|
(1,257
|
)
|
|
-
|
|
|
(1,257
|
)
|
Changes in operating assets and liabilities
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
(27,372
|
)
|
|
(25,466
|
)
|
|
(35,710
|
)
|
|
(36,760
|
)
|
Prepaid content acquisition costs
|
|
56,313
|
|
|
24,484
|
|
|
(44,211
|
)
|
|
(9,358
|
)
|
Prepaid expenses and other assets
|
|
334
|
|
|
1,389
|
|
|
(12,321
|
)
|
|
(16,566
|
)
|
Accounts payable, accrued and other current liabilities
|
|
10,284
|
|
|
9,310
|
|
|
5,294
|
|
|
9,053
|
|
Accrued content acquisition costs
|
|
(12,543
|
)
|
|
(2,047
|
)
|
|
(3,668
|
)
|
|
4,016
|
|
Accrued compensation
|
|
4,994
|
|
|
1,967
|
|
|
15,364
|
|
|
(10,679
|
)
|
Other long-term liabilities
|
|
786
|
|
|
(2,475
|
)
|
|
1,384
|
|
|
(3,007
|
)
|
Deferred revenue
|
|
(3,612
|
)
|
|
(2,513
|
)
|
|
8,420
|
|
|
3,105
|
|
Reimbursement of cost of leasehold improvements
|
|
-
|
|
|
25
|
|
|
4,397
|
|
|
5,261
|
|
Net cash (used in) provided by operating activities
|
|
(2,618
|
)
|
|
7,918
|
|
|
(181,691
|
)
|
|
(210,709
|
)
|
Investing activities
|
|
|
|
|
|
|
|
|
Purchases of property and equipment
|
|
(13,369
|
)
|
|
(2,795
|
)
|
|
(59,769
|
)
|
|
(15,656
|
)
|
Internal-use software costs
|
|
(7,871
|
)
|
|
(6,209
|
)
|
|
(30,210
|
)
|
|
(20,157
|
)
|
Changes in restricted cash
|
|
-
|
|
|
-
|
|
|
(250
|
)
|
|
(642
|
)
|
Purchases of investments
|
|
-
|
|
|
-
|
|
|
(12,413
|
)
|
|
-
|
|
Proceeds from maturities of investments
|
|
12,840
|
|
|
4,998
|
|
|
47,656
|
|
|
42,082
|
|
Proceeds from sales of investments
|
|
-
|
|
|
-
|
|
|
3,507
|
|
|
-
|
|
(Payments for) proceeds from sales of subsidiaries, net of cash
|
|
-
|
|
|
(1,111
|
)
|
|
-
|
|
|
124,319
|
|
Payments related to acquisitions, net of cash acquired
|
|
-
|
|
|
-
|
|
|
(676
|
)
|
|
-
|
|
Net cash (used in) provided by investing activities
|
|
(8,400
|
)
|
|
(5,117
|
)
|
|
(52,155
|
)
|
|
129,946
|
|
Financing activities
|
|
|
|
|
|
|
|
|
Proceeds from issuance of redeemable convertible preferred stock
|
|
-
|
|
|
-
|
|
|
-
|
|
|
480,000
|
|
Payments of issuance costs
|
|
-
|
|
|
(1,227
|
)
|
|
(32
|
)
|
|
(30,511
|
)
|
Repayment of debt arrangements
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(90,000
|
)
|
Borrowings under debt arrangements
|
|
-
|
|
|
-
|
|
|
90,000
|
|
|
-
|
|
Proceeds from employee stock purchase plan
|
|
3,306
|
|
|
2,914
|
|
|
9,701
|
|
|
10,926
|
|
Proceeds from exercise of stock options
|
|
446
|
|
|
1,942
|
|
|
3,457
|
|
|
9,778
|
|
Tax payments from net share settlements of restricted stock units
|
|
(243
|
)
|
|
-
|
|
|
(3,369
|
)
|
|
-
|
|
Net cash provided by financing activities
|
|
3,509
|
|
|
3,629
|
|
|
99,757
|
|
|
380,193
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
(242
|
)
|
|
(14
|
)
|
|
(634
|
)
|
|
223
|
|
Net (decrease) increase in cash and cash equivalents
|
|
(7,751
|
)
|
|
6,416
|
|
|
(134,723
|
)
|
|
299,653
|
|
Cash and cash equivalents at beginning of period
|
|
207,695
|
|
|
493,181
|
|
|
334,667
|
|
|
199,944
|
|
Cash and cash equivalents at end of period
|
|
$
|
199,944
|
|
|
$
|
499,597
|
|
|
$
|
199,944
|
|
|
$
|
499,597
|
|
|
|
|
|
|
Pandora Media, Inc.
Reconciliation of GAAP to Non-GAAP Measures
(in thousands, except per share amounts)
(unaudited)
|
|
|
|
|
|
|
|
Quarter ended December 31,
|
|
Year ended December 31,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Advertising revenue
|
|
|
|
|
|
|
|
|
Advertising revenue
|
|
$
|
313,340
|
|
|
$
|
297,674
|
|
|
$
|
1,072,490
|
|
|
$
|
1,074,927
|
|
Australia and New Zealand ("ANZ") advertising revenue
|
|
(1,988
|
)
|
|
-
|
|
|
(7,760
|
)
|
|
(4,139
|
)
|
Advertising revenue, excluding ANZ
|
|
$
|
311,352
|
|
|
$
|
297,674
|
|
|
$
|
1,064,730
|
|
|
$
|
1,070,788
|
|
|
|
|
|
|
|
|
|
|
Subscription revenue
|
|
|
|
|
|
|
|
|
Subscription revenue
|
|
59,829
|
|
|
97,661
|
|
|
225,786
|
|
|
315,853
|
|
ANZ subscription revenue
|
|
(686
|
)
|
|
-
|
|
|
(2,582
|
)
|
|
(1,578
|
)
|
Subscription revenue, excluding ANZ
|
|
$
|
59,143
|
|
|
$
|
97,661
|
|
|
$
|
223,204
|
|
|
$
|
314,275
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
|
|
|
|
|
|
Total revenue
|
|
392,598
|
|
|
395,335
|
|
|
1,384,826
|
|
|
1,466,812
|
|
ANZ total revenue
|
|
(2,674
|
)
|
|
-
|
|
|
(10,342
|
)
|
|
(5,717
|
)
|
Ticketing service revenue
|
|
(19,429
|
)
|
|
-
|
|
|
(86,550
|
)
|
|
(76,032
|
)
|
Total revenue, excluding ANZ and Ticketfly
|
|
$
|
370,495
|
|
|
$
|
395,335
|
|
|
$
|
1,287,934
|
|
|
$
|
1,385,063
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
|
135,899
|
|
|
$
|
146,441
|
|
|
$
|
488,476
|
|
|
$
|
499,745
|
|
Stock-based compensation-Cost of revenue
|
|
1,583
|
|
|
817
|
|
|
6,296
|
|
|
3,318
|
|
Amortization of intangibles-Cost of revenue
|
|
1,419
|
|
|
1,532
|
|
|
5,675
|
|
|
7,032
|
|
Expense associated with the restructurings
|
|
-
|
|
|
-
|
|
|
-
|
|
|
390
|
|
Ticketing service revenue
|
|
(19,429
|
)
|
|
-
|
|
|
(86,550
|
)
|
|
(76,032
|
)
|
ANZ total revenue
|
|
(2,674
|
)
|
|
-
|
|
|
(10,342
|
)
|
|
(5,717
|
)
|
Cost of revenue - Ticketing service (1)
|
|
12,604
|
|
|
-
|
|
|
53,417
|
|
|
47,963
|
|
Cost of revenue - ANZ (1)
|
|
2,581
|
|
|
(124
|
)
|
|
6,278
|
|
|
5,660
|
|
Non-GAAP gross profit, excluding ANZ and Ticketfly
|
|
$
|
131,983
|
|
|
$
|
148,666
|
|
|
$
|
463,250
|
|
|
$
|
482,359
|
|
Non-GAAP gross margin
|
|
36
|
%
|
|
38
|
%
|
|
36
|
%
|
|
35
|
%
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA and non-GAAP net loss
|
|
|
|
|
|
|
|
|
Net loss
|
|
(90,009
|
)
|
|
(44,749
|
)
|
|
(342,978
|
)
|
|
(518,395
|
)
|
Depreciation and amortization
|
|
17,277
|
|
|
13,827
|
|
|
60,757
|
|
|
62,948
|
|
Stock-based compensation
|
|
34,617
|
|
|
30,104
|
|
|
138,458
|
|
|
128,431
|
|
Other expense, net
|
|
7,227
|
|
|
4,800
|
|
|
24,447
|
|
|
26,311
|
|
Provision for (benefit from) income taxes
|
|
483
|
|
|
(1,667
|
)
|
|
(228
|
)
|
|
(790
|
)
|
Expense associated with the restructurings
|
|
-
|
|
|
3,599
|
|
|
-
|
|
|
12,032
|
|
Goodwill impairment
|
|
-
|
|
|
-
|
|
|
-
|
|
|
131,997
|
|
(Gain) loss on sales of subsidiaries
|
|
-
|
|
|
(81
|
)
|
|
-
|
|
|
9,378
|
|
Contract termination fees
|
|
-
|
|
|
-
|
|
|
-
|
|
|
23,044
|
|
Adjusted EBITDA
|
|
$
|
(30,405
|
)
|
|
$
|
5,833
|
|
|
$
|
(119,544
|
)
|
|
$
|
(125,044
|
)
|
Income tax effects of non-GAAP pre-tax loss
|
|
19,018
|
|
|
(42,674
|
)
|
|
60,543
|
|
|
21,563
|
|
Other expense, net
|
|
(7,227
|
)
|
|
(4,800
|
)
|
|
(24,447
|
)
|
|
(26,311
|
)
|
(Provision for) benefit from income taxes
|
|
(483
|
)
|
|
1,667
|
|
|
228
|
|
|
790
|
|
Depreciation
|
|
(10,558
|
)
|
|
(11,932
|
)
|
|
(34,491
|
)
|
|
(46,155
|
)
|
Non-GAAP net loss
|
|
$
|
(29,655
|
)
|
|
$
|
(51,906
|
)
|
|
$
|
(117,711
|
)
|
|
$
|
(175,157
|
)
|
|
|
|
|
|
|
|
|
|
Non-GAAP net loss per common share - basic and diluted
|
|
$
|
(0.13
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(0.51
|
)
|
|
$
|
(0.72
|
)
|
Weighted average basic and diluted common shares
|
|
234,173
|
|
|
249,746
|
|
|
230,693
|
|
|
243,637
|
|
(1) Excludes costs related to stock-based compensation, amortization
of intangibles, amortization of non-recoupable ticketing contract
advances and expense related to restructurings.
|
|
|
|
|
|
Pandora Media, Inc.
Reconciliation of GAAP to Non-GAAP Measures continued
(in thousands)
(unaudited)
|
|
|
|
|
|
|
|
Quarter ended December 31,
|
|
Year ended December 31,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Product development
|
|
|
|
|
|
|
|
|
Product development
|
|
37,976
|
|
|
34,035
|
|
|
140,707
|
|
|
154,325
|
|
Stock-based compensation
|
|
(7,884
|
)
|
|
(7,478
|
)
|
|
(30,975
|
)
|
|
(33,243
|
)
|
Amortization of intangibles
|
|
(1,822
|
)
|
|
(97
|
)
|
|
(7,289
|
)
|
|
(2,270
|
)
|
Expense associated with the restructurings
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(733
|
)
|
Product development - Ticketing service (1)
|
|
(3,965
|
)
|
|
-
|
|
|
(14,270
|
)
|
|
(11,344
|
)
|
Product development - ANZ (1)
|
|
(110
|
)
|
|
(43
|
)
|
|
(459
|
)
|
|
(338
|
)
|
Non-GAAP product development, excluding ANZ and Ticketfly
|
|
$
|
24,195
|
|
|
$
|
26,417
|
|
|
$
|
87,714
|
|
|
$
|
106,397
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
133,251
|
|
|
113,961
|
|
|
490,364
|
|
|
492,542
|
|
Stock-based compensation
|
|
(14,445
|
)
|
|
(13,459
|
)
|
|
(58,118
|
)
|
|
(56,116
|
)
|
Amortization of intangibles
|
|
(1,713
|
)
|
|
(83
|
)
|
|
(6,850
|
)
|
|
(3,049
|
)
|
Amortization of non-recoupable ticketing contract advances
|
|
(1,582
|
)
|
|
-
|
|
|
(5,720
|
)
|
|
(3,709
|
)
|
Loss on sales of subsidiaries
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(75
|
)
|
Expense associated with the restructurings
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5,493
|
)
|
Sales and marketing - Ticketing service (1)
|
|
(4,405
|
)
|
|
-
|
|
|
(18,421
|
)
|
|
(15,326
|
)
|
Sales and marketing - ANZ (1)
|
|
(3,129
|
)
|
|
19
|
|
|
(10,365
|
)
|
|
(4,392
|
)
|
Non-GAAP sales and marketing, excluding ANZ and Ticketfly
|
|
$
|
107,977
|
|
|
$
|
100,438
|
|
|
$
|
390,890
|
|
|
$
|
404,382
|
|
|
|
|
|
|
|
|
|
|
General and administrative
|
|
|
|
|
|
|
|
|
General and administrative
|
|
46,971
|
|
|
40,061
|
|
|
176,164
|
|
|
190,711
|
|
Stock-based compensation
|
|
(10,705
|
)
|
|
(8,350
|
)
|
|
(43,069
|
)
|
|
(35,754
|
)
|
Amortization of intangibles
|
|
(183
|
)
|
|
(183
|
)
|
|
(732
|
)
|
|
(733
|
)
|
Gain (loss) on sales of subsidiaries
|
|
-
|
|
|
81
|
|
|
-
|
|
|
(9,303
|
)
|
Expense associated with the restructurings
|
|
-
|
|
|
(3,599
|
)
|
|
-
|
|
|
(5,416
|
)
|
General and administrative - Ticketing service (1)
|
|
(2,866
|
)
|
|
-
|
|
|
(11,954
|
)
|
|
(15,696
|
)
|
General and administrative - ANZ (1)
|
|
(511
|
)
|
|
(474
|
)
|
|
(2,687
|
)
|
|
(2,048
|
)
|
Non-GAAP general and administrative, excluding ANZ and Ticketfly
|
|
$
|
32,706
|
|
|
$
|
27,536
|
|
|
$
|
117,722
|
|
|
$
|
121,761
|
|
(1) Excludes costs related to stock-based compensation, amortization
of intangibles, amortization of non-recoupable ticketing contract
advances and expense related to restructurings.
|
|
|
|
|
|
Pandora Media, Inc.
Ad RPM, Ad LPM, Subscription ARPU and Subscription LPU History
(unaudited)
|
|
|
|
|
|
|
|
Quarter ended December 31,
|
|
Year ended December 31,
|
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
Advertising RPM
|
|
$
|
67.43
|
|
|
$
|
75.65
|
|
|
$
|
55.94
|
|
|
$
|
65.32
|
Advertising LPM
|
|
$
|
37.07
|
|
|
$
|
36.77
|
|
|
$
|
32.40
|
|
|
$
|
35.70
|
Subscription ARPU
|
|
$
|
4.73
|
|
|
$
|
6.08
|
|
|
N/A
|
|
$
|
5.34
|
Subscription LPU
|
|
$
|
3.12
|
|
|
$
|
4.41
|
|
|
N/A
|
|
$
|
3.62
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20180221006310/en/
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