Today Pandora reported its fourth-quarter financial performance, essentially matching revenue expectations, and beating on earnings per share. For the period, Pandora had non-GAAP revenue of $200.8 million, and non-GAAP earnings per share of $0.11. Investors had expected $0.08 in earnings per share and revenue of $201 million. Given those results, why is Pandora falling so heavily in after-hours trading?
Pandora had its most profitable quarter since its IPO, but its stock is getting punished by the market following the company’s Q4 earnings announcement. Pandora’s stock has been down as much by 9% ever since its earnings came out. During Pandora’s earnings call, the stock has dropped by as much as 10.69%. That might seem somewhat strange given that Pandora reported its biggest quarter of profit since it went public in 2011, and continues to lead the market by number of listeners. Pandora also nearly matched analyst’s expectations for the quarter with revenues of $200.8 million versus $201 million, and beat analyst’s expectations with an EPS of $0.11 versus $0.08.