Napster today reported financial results for its fiscal third quarter ended December 31, 2006.

Net revenue for the third quarter of fiscal 2007 was a record $28.4 million, up 21% from $23.5 million in the third quarter of fiscal 2006. Net revenue for the third quarter of 2007 includes $2.4 million of non-recurring revenue, including prepaid card breakage, with no associated cost of revenue. Net loss for the third quarter of fiscal 2007 was $9.5 million, or $0.22 per basic and diluted share, compared to net loss of $17.0 million, or $0.40 per basic and diluted share, in the third quarter of fiscal 2006.

“Napster’s third quarter delivered record revenue, strong subscriber growth and a dynamic and highly successful launch of Napster Japan,” said Chris Gorog, Napster’s chairman and chief executive officer. “We are very pleased with our strategic acquisition of AOL’s music subscription business, which should increase our subscriber base by more than 50 percent when AOL’s subscribers are transitioned to Napster in late March. We also expect a healthy funnel of additional new subscribers as Napster becomes AOL’s exclusive music subscription provider going forward. Our partnerships with wireless carriers now give us access to over 140 million consumers and the opportunity to attach to the growing global ecosystem of Windows-based music enabled cell phones. We believe Napster is one of the best-positioned companies in digital music to take advantage of this new phenomenon.”

Napster’s total worldwide paid subscriber base, including university and Japanese subscribers, increased by approximately 48,000 to 566,000 as of December 31, 2006.

Napster ended the third fiscal quarter with a total of $80.9 million of cash, cash equivalents and short-term investments.