Pandora (NYSE:P) reported third-quarter earnings last week. After opening higher, shares closed down modestly as investors digested the results. Revenue jumped 50% to nearly $182 million, which included $144 million in advertising revenue. Of that, Pandora generated more than $100 million in mobile advertising revenue, a new milestone for the music streamer. That all translated into a net loss of $1.7 million, or $0.01 per share. Pandora also grew its domestic market share, and grabbed 8% of the market in October.

The company is now demonstrating that it has the potential to scale its business. Ad revenue growth outpaced content acquisition costs by a small margin, and subscription revenue nearly tripled. That will help Pandora diversify aware from a purely ad-supported model. Going forward, one of Pandora's greatest opportunities will be to continue focusing on the local ad market, which is its fastest growing segment. Additionally, local ads fetch higher prices.

In this segment of Tech Teardown, Erin Kennedy discusses Pandora's earnings report with Evan Niu, CFA, our tech and telecom bureau chief.