Investor Presentation

Q3 CY2015
Safe Harbor
These slides and the accompanying oral presentation contain forward-looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995. All statements other than statements of historical facts contained in these slides and the accompanying oral presentation,
including statements regarding Pandora Media’s (“Pandora” or the “Company”) future operations, future financial position, future revenue, projected
expenses, opportunities, prospects, plans and objectives of management and competitive and technological trends are forward-looking
statements. In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “estimate,” “expect,” “intent,” “may,”
“might,” “plan,” “project,” “will,” “would,” “should,” “could,” “can,” “predict,” “potential,” “continue,” “objective,” or the negative of these terms or similar
expressions. The Company has based these forward-looking statements largely on its estimates of its financial results and its current expectations
and projections about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy,
short term and long-term business operations and objectives and financial needs. These forward-looking statements are subject to a number of
risks, uncertainties and assumptions, including, but not limited to, our operation in an emerging market and our relatively new and evolving
business model, our ability to evaluate our current and future prospects, our ability to generate additional revenue on a cost-effective basis, our
ability to attract and retain advertisers, our ability to increase our listener base and listener hours, competitive factors, our ability to establish and
maintain relationships with makers of mobile devices, consumer electronic products and automobiles, our ability to continue operating under
existing laws and licensing regimes and a number of other factors outside of our control. These risks and uncertainties may also include those
described under the heading “Risk Factors” and elsewhere in the Company’s registration statement on Form S-3 on file with the Securities and
Exchange Commission (the “SEC”) for the offering to which this presentation relates and filings the Company makes from time to time with the SEC.
Moreover, the Company operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for
Company management to predict all risks, nor can the Company assess the impact of all factors on its business or the extent to which any factor, or
combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements the Company may
make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in these slides and the
accompanying oral presentation may not occur and actual results could differ materially and adversely from those anticipated or implied in the
forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although the Company believes
that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee that the future results, levels of
activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Moreover, neither the
Company nor any other person assumes responsibility for the accuracy and completeness of the forward-looking statements. Any forward-looking
statement speaks only as of its date. Except as required by law, the Company undertakes no obligation to update publicly any forward-looking
statements for any reason after the date of this presentation, to conform these statements to actual results or to changes in the Company’s
expectations. The Company has filed a registration statement (including a preliminary prospectus) with the SEC for the offering to which this
presentation relates. Before you invest, you should read the preliminary prospectus in that registration statement and other documents the
Company has filed with the SEC for more complete information about the Company and this offering. You may get these documents for free by
visiting EDGAR on the SEC Web site at www.sec.gov. Alternatively, the Company, any underwriter or any dealer participating in the offering will
arrange to send you the preliminary prospectus, if you request it by calling toll free 1-866-803-9204.

2
Dominic Paschel – Vice President
Redefining Radio for a Connected World
Radio Consumption

Radio Audience Music Listening

91% of U.S. Population 80% Radio

245M+ Americans Radio: 18 hours per week

Sources: RADAR ® 124, March 2015 (C) Copyright Nielsen Audio(Monday-Sunday 24-Hour Weekly Cume Estimates, All Radio)
(http://www.rab.com/public/marketingguide/DataSheet.cfm?id=1); Music listening as a percentage of radio listening source is VSS Communications Industry
Forecasts, 22nd and 24th Editions.
5
Radio Consumption is Different

Serendipity and Multi-Tasking

Auto Home
60% 17%

Office
(& other)
11%

Source: GfK MRI Doublebase 2014 - Listening Location: Listen Most (Percentages will not add to 100% due to duplication among listening locations), RAB
http://www.rab.com/public/marketingGuide/DataSheet.cfm?id=18

6
Redefining Radio for a Connected World

Broadcast Radio Internet

Free One to One

No Effort Interactive
Ubiquitous Personalized
Discover
New Music

Personalized Radio

7
An Exciting Point in Pandora’s Trajectory

Growth in Active Listeners and

Listener Hours

Critical Mass in Local Markets

Significant
Growth Potential
Integrated into the Broadcast
Radio Ad Buying Workflow Reach
Engagement
Monetization
Approaching Mobile RPM
Inflection Point

Connected Device Integrations

8
Significant Progress Since the IPO

At IPO Q3 CY2015 Change

Registered Users 100M+ 250M+ +150%

Reach

Active Users 37M 78.1M +110%

Thumbs 10BN+ 60BN+ +450%

Engagement

Quarterly Listener Hours 1.84BN 5.14BN +180%

Quarterly Mobile Hours 1.29BN 4.36BN +238%

Share of Radio Listening 3.4% 9.49% +607bps

Quarterly Revenue $67.0M $311.6M +365%

Monetization

Quarterly Mobile Revenue $31.9M $255.2M +698%

Quarterly Mobile RPM $24.67 $58.44 +137%

Note: Registered Users and Thumbs are cumulative data, Active Users and Share of Radio Listening are as of September 2015, remaining data is for full Q3
quarter; Share of Radio Listening from internal company estimates synthesizing Triton Digital, Arbitron and U.S. Census Bureau data for periods indicated. Share
of Radio Listening estimate includes satellite. Financial metrics reflect non-GAAP revenue; a reconciliation to GAAP metrics is provided in the Appendix A and E
9 hereto
Source: internal company data, July 2011 and September 2015
It is Just the Beginning

All Radio Listening Hours

September 2015

Pandora
9.49%
Satellite Radio

7.85% Terrestrial
Other Internet Radio
3.34%
Radio

79.32%

Source: Internal company estimates synthesizing Triton Digital, RAB and U.S. Census Bureau data for period indicated, September 2015

10
Significant Competitive Strengths

Share of Internet Radio Listening

58%
Proprietary
Technologies 79.2%

Strong Brand
50.2%
at IPO

Significant Scale
24%

Multi-Channel
9%
Distribution
1% 1% 1% 1% 1% 1% Less than 1%

Note: All represent share among the top 20 stations and networks in the U.S., Mon-Sun 6AM-Mid, July 2014
Source: Triton Digital based on average active sessions

11
Pioneering Personalization Technologies

Human Machine

Machine Listening and

Music Genome Project
Statistical Techniques

Data

40BN+ Thumbs

12
Pandora is a Leader in Mobile Engagement

Average Monthly Mobile App Minutes per Visitor

1,613

1,380

941

602 568 553 535

485 447 409

Facebook Apple Spotify SoundcloudMidasplayer Google Big Fish Games

PrettySimple MyVegas

Source: comScore, July 2015. The data presented does not reflect a comprehensive ranking of all mobile apps

13
Mobile and Connected Device Listening Dominates

Mobile/Device vs. Web Hours

Mobile/Device Web

82% 83% 84% 83% 84% 86% 85%

78% 78% 80% 79% 80% 81%

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
CY2012 CY2012 CY2013 CY2013 CY2013 CY2013 CY2014 CY2014 CY2014 CY2014 CY2015 CY2015 CY2015

Source: Internal company data, June 2015

14
Significant Market Opportunity: 3 Major Ad Markets

74% local
CAGR 13.2%

$22.5

$17.9 CAGR 48.1%

$15.4
$12.4 $12.1

$1.7

2012 2017 2012 2017 2012 2017

U.S. Radio Advertising U.S. Mobile Display Advertising U.S. Online Display + Video +
Rich Media Advertising

Note: Dollars in billions

Sources: IDC June 2013, Veronis Suhler Stevenson Communications Industry Forecast 2012 for local market size

15
4th Largest Mobile Advertising Company in the U.S.

CY14 mobile ad revenue: $560.2M

Growth rate Y/Y +53%

2014 U.S. Mobile Display Ad Revenue Share

Pandora
Google
6% Twitter
10% 7%
Apple iAd
5%
2% Millennial Media

Facebook
37%

33%

Other

Note: Net ad revenues after companies pay traffic acquisition costs (TAC) to partner sites; includes display (banners and other, rich media and video); ad
spending on tablets is included; excludes SMS, MMS and P2P messaging-based advertising
Source: Company revenue and growth rate from internal company estimates, U.S. mobile display ad revenue share source is eMarketer, March 2015
16
Defining the Frontier of Mobile Connectivity
Connected Devices Gaining Share

Pandora Listening Hours Across Devices

Nearly 30% of Pandora listeners engage across two or more different devices
4500
Millions

Web 76%
4000
Mobile
3500 Auto/CE/Other

3000

2500
40 hour
2000
mobile
cap in
1500
effect
1000
15%
500
9%
0
Q212 Q312 Q412 Q113 Q213 Q313 Q413 Q114 Q214 Q314 Q414 Q115 Q215 Q315

Source: Internal company data, September 2015

18
Pandora Everywhere

Desktop/Laptop Consumer Home Electronics

Smartphone/Tablet Auto

19
Auto Partners

Integration with more than

Vehicle models
(1/3 of all new U.S. cars in 2013)

2010 2011 2012 2013

Automotive
Aftermarket devices

Source: Internal company data, September 2014

20
Focused on Mobile Monetization

Two Pronged Approach

Digital Strategy: Online + Mobile Radio Strategy: Audio Everywhere

Extend Reach Superior Audio Product

Reach people wherever they listen Targetable • Interactive • Measureable

21
Unlocking Local Audio Advertising
 #1 IN 47 U.S. MARKETS
LARGER THAN TOP-RATED BROADCAST STATIONS, A18+

 SEATTLE
 SPOKANE

 GRAND RAPIDS  ROCHESTER

 BUFFALO
 ALBANY
 FLINT/SAGINAW
 SALT LAKE CITY
 SACRAMENTO  DES MOINES  TOLEDO
 INDIANAPOLIS
 SAN FRANCISCO  DENVER
 BALTIMORE
 KANSAS CITY
 SAN JOSE  COLORADO SPRINGS
 WASHINGTON DC
 LEXINGTON
 BAKERSFIELD  LOUISVILLE  RICHMOND

 LOS ANGELES  TULSA  RALEIGH

 ALBUQUERQUE  OKLAHOMA CITY  NORFOLK
 RIVERSIDE/SAN BERNARDINO  CHATTANOOGA
 LITTLE ROCK  CHARLOTTE
 SAN DIEGO
 BIRMINGHAM  GREENVILLE
 TUCSON  DALLAS  ATLANTA

 EL PASO  AUSTIN

 MOBILE  ORLANDO

 MIAMI
 NEW ORLEANS
 FORT MEYERS

 HARLINGEN/MCALLEN

Source: Nielsen Scarborough, Nielsen Audio radio metro

area, Release 2 2015 (Pandora is measured as 30-day
cume, broadcast radio is measured as 7-day cume)
Attacking the Local Opportunity

5
Inertia

4
Local
Sales Force
3
Ad Buying
Platform
2
Measurement

1
Scale

24
Blue Chip and Local Advertiser Customer Base
Food & Media/ Consumer/ Travel/ Local
Auto Technology
Beverage Telecom Retail Hospitality Advertising

National advertisers with local campaigns

25
Pandora is Now Integrated into the Radio
Advertising Buyside Workflow
Radio buyers can now compare Pandora audience size with other local radio
stations in markets across the country

26
Financials
Pandora’s Business Model

Advertising Subscription Service

Q3CY15 Revenue $254.7M Q3CY15 Revenue $56.9M

Y/Y Growth 31% Y/Y Growth 26%

% of Total Revenue 82% % of Total Revenue 18%

Note: Subscription and other revenue combined; Financial metrics reflect non-GAAP revenue; a reconciliation to GAAP metrics is provided in Appendix B hereto
Source: Internal company data, September 2015

28
Active User Growth

Active Users

(Millions)

Y/Y +2.1%
76.5 78.1
72.7

58.3

Q3 CY2012 Q3 CY2013 Q3 CY2014 Q3 CY2015

Note: Total active users are defined as the number of distinct registered users that have requested audio from our servers within the trailing 30 days to the
end of the final calendar month of the period
Source: Internal company data, June 2015
29
Growth in Listener Hours

Quarterly Listener Hours

(Billions)

Y/Y +3.2%
5.14
4.99

3.99
3.43

Q3 CY2012 Q3 CY2013 Q3 CY2014 Q3 CY2015

Source: Internal company data, June 2015

30
Quarterly Revenue Growth

Quarterly Revenue
(Millions)
Y/Y +30%

$311.6

$239.6

$171.3

$109.8

Q3 CY2012 Q3 CY2013 Q3 CY2014 Q3 CY2015

Note: Financial metrics reflect non-GAAP revenue; a reconciliation to GAAP metrics is provided in Appendix A hereto
Source: Internal company data, June 2015

31
Proven Ability to Increase Mobile Monetization

Mobile RPM Progression

Y/Y +30%

$58.44

$44.96
$39.32

$25.20

Q3 CY2012 Q3 CY2013 Q3 CY2014 Q3 CY2015

Note: Financial metrics reflect non-GAAP revenue; a reconciliation to GAAP metrics is provided in Appendix E hereto
Source: Internal company data, June 2015

32
Unpacking RPM: Key Drivers
Drivers

User growth
Listener hour growth
Inventory
Ad load
Usage optimization

RPM Sell-through
Market acceptance
Media buying workflow integrations
Drivers rate
Broader sales coverage

Market acceptance
Unique format
CPM
Mix shift toward premium audio/local
advertising
Ability to target

33
Expanding Variable Margin Allows for Investment in S&M

Expanding Gross Margin Investment in High ROI Growth

Growing Revenue Less Content Costs Increasing Mobile RPM
as % Revenue1

Potential 68% Potential

for further for further
leverage leverage $71.88

51%
$58.44
44%

$44.96

Q3 CY2014 Q3 CY2015 Q3CY2015

Q3 CY2014 Q3 CY2015 Q3 CY2015
Mobile Web Mobile Web
1Advertising only.
Note: RPM financial metrics reflect non-GAAP revenue; a reconciliation to GAAP metrics is provided in Appendix E hereto
34 Source: Internal company data, June 2015
Strong Mobile Revenue Growth

Mobile Revenue Share Quarterly Mobile Revenue

(Q3 CY2015) (Millions)

Desktop Y/Y +37%

18%

$255.0

$188.0

82%

Mobile/
Other Devices

Q3 CY2014 Q3 CY2015

Note: Financial metrics reflect non-GAAP revenue; a reconciliation to GAAP metrics is provided in Appendix A hereto
Source: Internal company data, September 2015

35
Royalty and Licensing Agreements

Sound Recording Rights SoundExchange Agreement

(Licensing Cost per Ad-Supported Track)

Statutory License $0.0013 $0.0014

$0.0012
$0.0010 $0.0011

SoundExchange

CY2011 CY2012 CY2103 CY2014 CY2015

SoundExchange arbitration process for
future rates began mid-2014 CY2014 Content Acquisition Cost
Music Composition Rights

ASCAP, BMI, SESAC ASCAP 3%

BMI+ SESAC 3%
92%
SoundExchange
Other Publishers

Source: Company information, March 2015

36
Significant Long-Term Growth Drivers

Develop Increase Build the Increase Expand Increase Expand

innovative utilization of sales force paid distribution content internationally
and scalable ad inventory listening offering
ad products

Increase Monetization Grow Listener Hours

Enhance Service

37
Long-Term Business Model

Last Year Today Goal

% of Non-GAAP Revenues Q3 CY2014 Q3 CY2015

Content Acquisition Cost 46.5% 41.5% ~40%

Cost of Revenue – Other 6.0% 6.4% ~7%

Product Development 3.7% 4.9% ~7%

Sales and Marketing 26% 30% ~20%

General and Administrative 9.4% 9.0% ~6%

Non-GAAP Gross Margin 47.5% 52.1% ~50%

Note: A reconciliation to GAAP metrics is provided in Appendix A and D hereto

Source: Internal company data, June 2015

38
Appendix A
Financial Reconciliation – GAAP vs. Non-GAAP

Revenue and Net Income

Prior to FY2012 there were no Non-GAAP Revenue Adjustments
Three months ended
September 30,
2014 2015
(unaudited)
Revenue
GAAP total revenue $ 239,593 $ 311,562
Subscription return reserve - -
Non-GAAP total revenue $ 239,593 $ 311,562

Net loss
GAAP net loss $ (2,025) $ (85,930)
Subscription return reserve - -
Amortization of intangibles 182 438
Stock-based compensation 22,111 28,794
Pre-1972 sound recordings settlement - 57,947
RMLC publisher royalty charge - 23,934
Income tax effects of non-GAAP adjustments - (2,332)
Non-GAAP net income $ 20,268 $ 22,851

Cost of revenue - content acquisition costs

GAAP cost of revenue - content acquisition costs $ 111,315 $ 211,272
Pre-1972 sound recordings settlement - (57,947)
RMLC publisher royalty charge - (23,934)
Non-GAAP cost of revenue - content acquisition costs $ 111,315 $ 129,391
40
Appendix B
Financial Reconciliation – GAAP vs. Non-GAAP

Revenue
Prior to FY2012 there were no Non-GAAP Revenue Adjustments

Three months ended

September 30,
2014 2015
(unaudited)
Revenue - GAAP
Advertising $ 194,293 $ 254,656
Subscription and other 45,300 56,906
Total revenue - GAAP 239,593 311,562

Revenue - non-GAAP
Total revenue - GAAP $ 239,593 $ 311,562
Subscription return reserve - -
Total revenue - non-GAAP $ 239,593 $ 311,562

41
Appendix C
Financial Reconciliation – GAAP vs. Non-GAAP

Mobile Revenue
Prior to FY2012 there were no Non-GAAP Revenue Adjustments

Three months ended

September 30,
2014 2015
(unaudited)
Total revenue by platform
Computer $ 51,614 $ 56,357
Mobile and other connected devices 187,979 255,205
Total $ 239,593 $ 311,562

Total non-GAAP revenue by platform

Computer $ 51,614 $ 56,357
Mobile and other connected devices 187,979 255,205
Total $ 239,593 $ 311,562

42
Appendix D
Financial Reconciliation – GAAP vs. Non-GAAP

Cost and Expenses

Prior to FY2012 there were no Non-GAAP Revenue Adjustments

Three months ended

September 30,
2014 2015
(unaudited)
Cost of revenue
Cost of revenue - Content acquisition costs $ 111,315 $ 211,272
Cost of revenue - Other 15,453 21,414
Total cost of revenue - GAAP 126,768 232,686
Less: Stock compensation - Cost of revenue - Other 1,063 1,427
Less: Pre-1972 sound recordings settlement - 57,947
Less: RMLC publisher royalty charge - 23,934
Total cost of revenue - non-GAAP $ 125,705 $ 149,378

Operating expenses
Product development $ 13,381 $ 21,849
Sales and marketing 72,320 107,286
General and administrative 29,143 35,603
Total operating expenses - GAAP 114,844 164,738
Less: Stock compensation - Product development 4,402 6,189
Less: Stock compensation - Sales and marketing 10,442 13,732
Less: Stock compensation - General and administrative 6,204 7,446
Less: Amortization of intangibles 182 438
Total operating expenses - non-GAAP $ 93,614 $ 136,933

43
Appendix E
Financial Reconciliation – GAAP vs. Non-GAAP

RPM
Prior to FY2012 there were no Non-GAAP Revenue Adjustments

Three months ended

September 30,
2014 2015
(unaudited)
Advertising RPMs
Computer $ 64.13 $ 71.88
Mobile and other connected devices 40.82 54.31
Total $ 44.35 $ 56.84

Total RPMs
Computer $ 63.67 $ 72.14
Mobile and other connected devices 44.96 58.44
Total $ 48.00 $ 60.52

Total RPMs based on non-GAAP revenue

Computer $ 63.67 $ 72.14
Mobile and other connected devices 44.96 58.44
Total $ 48.00 $ 60.52

44