After more than nine years of leadership, Pandora CEO, President and Chairman Joe Kennedy has resigned, making the announcement during Pandora’s quarterly earnings call on Thursday. The company’s board of directors has formed a search committee to find a suitable successor, and Kennedy will stay in his current role until the replacement is brought in.
Kennedy and Pandora wished to wind down their relationship on a positive note, citing milestones like 67 million monthly active listeners and 70% market share. But most telling were the company’s revenue and income figures. In fiscal 2013, Pandora totaled $427.1 million in revenue and $255.9 million in mobile revenue, with $125.1 million in revenue for the quarter that ended on January 31.
While those numbers beat Wall Street expectations and represent record revenue for the company, it still wasn’t enough to push Pandora into profitability – and Wall Street doesn’t like it when a post-IPO company is growing but still loses money. That likely translated into Kennedy’s decision to step down.
On that $125 million in Q4 revenue, Pandora took a quarterly loss of $14.6 million (9 cents per share), which exceeds its year-ago quarterly loss of $8.5 million (5 cents per share) on revenue of $81 million. Given the long string of losses, Pandora has been aggressively seeking ways to wring more cash from its subscribers, including limits on free listening and a fierce lobbying effort against royalty fees.
(See also Pandora Remixes Its Free Listening Limits.)
The Oakland, Calif.-based music recommendation service has had an up-and-down ride on the market since its IPO in the summer of 2011. Initially, Pandora opened at $16 per share and jumped into the $20s, but has since hovered just into the double-digit mark as the company scrambles to find ways to turn a profit.
Despite the tumultuous relationship with investors, Wall Street seems to be responding well to Kennedy’s decision: Pandora shares jumped almost 20%, to $13.96, in after-hours trading.