There was a lot to like about Pandora's (NYSE:P) fourth quarter results.

Sure, the streaming music service lost money again -- to the tune of $0.09 a share. That's even worse than the $0.05 per share loss the company reported a year ago.

But business trends are looking up. For one, listening hours surged by 53%, passing 4 billion. And Pandora now boasts an 8% market share of all U.S. radio. That's a lot of user engagement. Better still, that scale makes Pandora a serious contender for the type of national advertising campaigns that can really goose marketing revenue.

However, the best news to come out of the report by far was the company's improving sales of mobile advertising. Pandora's revenue per thousand listener hours jumped to $25 on mobile devices. That's still well below $53 it earned from desktop advertisements, but it's a major improvement over last year's number.

Mobile monetization is critical to Pandora, as close to 80% of the music it delivers is streamed from smartphones and tablets. Like Facebook and Google, Pandora has struggled in finding a way to build an effective advertising business model around mobile usage. If the company can better monetize that platform, then profitability could surge.

Pandora's earnings report wasn't all good news, though. CEO Joe Kennedy announced that he would be stepping down soon, after leading the company since 2004. He'll be leaving the position at a time when user engagement momentum is strong, but while costs are still a major problem.

Content acquisition costs rose faster than revenue again, jumping by 59% in the fourth quarter. And those costs don't seem likely to dip any time soon. Royalty rates, which drive Pandora's content costs, are slated to jump by 17%, to $0.14 in 2015.

With no help on the cost side, Pandora will have to depend almost completely on revenue increases to boost profitability. Still, as long as it can keep wringing more cash out of its mobile advertising business, stronger profits are exactly what Pandora can look forward to.

Fool contributor Demitrios Kalogeropoulos has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.