Pandora Media Inc (NYSE:P) investors have a fresh reason to smile today, after the music streaming firm announced that it expects to exceed previously announced Q4 2016 revenue and adjusted EBITDA guidance ranges given strong advertising performance and has surpassed 4.3 million in paid subscription customers.

Reacting to the news, Pandora shares rose nearly 7% to $12.85 in after-hours trading.

“During the fourth quarter, we accelerated our core advertising business, increased advertising RPM and saw strong improvements in adjusted EBITDA,” said Tim Westergren, CEO of Pandora. “Now, with all of the elements of our strategy in place, we are in the best position possible to expand our listener base, drive engagement and deliver significant value to all of our stakeholders.”

As a result of its direct deals with music labels and publishers, Pandora introduced Pandora Plus along with new features and functionality on its ad-supported tier to listeners at the end of the third quarter. By the end of December 2016, the product generated more than 375,000 net new subscribers.

“The initial response from both new and existing listeners to the enhancements on the service is extremely encouraging,” Westergren continues. “This excitement and engagement bodes well for the introduction of Pandora Premium later this quarter.”

Pandora is also undertaking operational efficiency measures to reduce overall operating costs in 2017. It plans to reduce its U.S. employee base (excluding Ticketfly) by approximately 7 percent by the end of Q1 2017. Additionally, the company is leveraging its analytics platform and ad insertion logic to drive additional revenue and realize leverage in content costs. Taken together, these measures are designed to ensure the company can execute on its core strategic initiatives without additional capital and enable further investments in product innovation to drive advertising revenue and subscription growth.

“2016 was a year of significant investment for Pandora. In 2017, we will manage the business toward full year adjusted EBITDA profitability,” said Westergren. “While making workforce reductions is always a difficult decision, the commitment to cost discipline will allow us to invest more heavily in product development and monetization and build on the foundations of our strategic investments.”

On the ratings front, Pandora Media has been the subject of a number of recent research reports. In a report issued on January 10, Albert Fried analyst Richard Tullo assigned a Hold rating on P. Separately, on January 6, Needham’s Laura Martin reiterated a Buy rating on the stock and has a price target of $16.00.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Richard Tullo and Laura Martin have a yearly average return of 1.0% and 17.9% respectively. Tullo has a success rate of 56% and is ranked #1911 out of 4340 analysts, while Martin has a success rate of 65% and is ranked #73.

Overall, 2 research analysts have rated the stock with a Sell rating, 9 research analysts have assigned a Hold rating and 7 research analysts have given a Buy rating to the stock. When considering if perhaps the stock is under or overvalued, the average price target is $14.80 which is 23% above where the stock opened today.

Pandora Media, Inc. provides an internet radio service in the United States, Australia and New Zealand. It offers a personalized experience for listeners to listen radio on smartphones, tablets, computers, car audio systems, and Internet-connected devices. Its also offers service through the Free Service and Pandora One models. The Free Service is advertising-supported and allows listeners access to music and comedy catalogs and personalized playlist generating system for free across all of the Pandora delivery platforms. The Pandora One covers paid subscription service without any advertising.