"We definitely think we can charge more than terrestrial radio, and do so," said McAndrews, adding Pandora's investments in local markets have paid off and the company will continue to invest in sales, infrastructure, tools and technology to support automation.
But investors wanted to know how Pandora planned to demonstrate ROI to local advertisers, and how the company planned to convince those advertisers to transition from terrestrial to digital.
"In terms of accountability, local advertisers tend to understand their markets quite well," McAndrews said. "You add in the accountability that we have because we're digital and we believe we can absolutely compete and exceed what terrestrial radio can do in terms of pointing people directly to advertisers and promotions."
Despite this hopeful look forward, Pandora's immediate present wasn't as rosy.
The company's Q4 revenue of $268 million fell below analysts' $277 million projections, causing shares of the company to plummet drastically following a call with investors Thursday evening (FY 2014 revenue was $920.8 million, a 44% increase YoY). Read the press release.
Additionally, investors worried about its monthly active user growth, which increased a meager 7% in Q4.
Despite these negatives, Pandora's mobile revenue, which constitutes 78% of total revenue, jumped 43% YoY to hit $209.5 million.
Advertising revenue in Q4 spiked 36% YoY to hit $220.1 million. FY 2014 ad revenue was $732.3 million, a 40% jump YoY.
Pandora stepped up its advertising efforts in 2014 through native content in the form of brand-sponsored stations with clients like Toyota and Sonos.
Moving forward, Pandora expects revenue to dip to the $220 million-$225 million range in 2015’s first quarter. For 2015 in full, the company projects that revenues will hit the $1.14 billion to $1.17 billion range.