Spotify, the music streaming giant, has revealed significant growth in both its user base and revenue, surpassing expectations and setting new records.
Monthly Active Users (MAUs) surged by 23 percent year-over-year (Y/Y), reaching 602 million, exceeding projections by 1 million. This remarkable growth was accompanied by a substantial increase in premium subscribers, rising by 15 percent to 236 million, further solidifying Spotify’s dominance in the streaming market.
The company witnessed a robust performance in net additions, with 28 million new users joining the platform, marking the second-largest Q4 net addition in Spotify’s history. Moreover, Q4 net additions for premium subscribers exceeded expectations by 1 million, totaling 10 million for the quarter and contributing to a record-breaking full-year net addition of 31 million.
Total revenue for the quarter climbed by 16 percent Y/Y to €3.7 billion, underscoring Spotify’s continued financial strength. Despite challenges, the company managed to maintain a gross margin of 26.7 percent, Spotify said in its earnings report.
Operating loss for the quarter was €75 million.
Spotify’s annual Wrapped Campaign, now in its 9th year, attracted over 225 million MAUs, highlighting the digital music platform’s enduring popularity and engagement. User engagement soared by over 40 percent across 170 markets, reflecting the online platform’s global appeal.
In a strategic move, Spotify enhanced its premium offering within the United States by incorporating more than 200,000 audiobook titles, diversifying its content portfolio and catering to evolving consumer preferences.
Spotify CEO Daniel Ek expressed optimism about the company’s future prospects, citing strategies including price increases to drive profitability. Ek emphasized a renewed focus on the bottom line, indicating a shift towards greater financial discipline.
Spotify’s expansion into podcasts and audiobooks aligns with its ambitious goal of reaching 1 billion users by 2030. Investments in podcasts, including high-profile partnerships such as Joe Rogan’s exclusive deal, have bolstered the platform’s content offerings and contributed to double-digit growth in podcast advertising revenue.
Daniel Ek reassured stakeholders of Spotify’s commitment to achieving consistent profitability in podcasting by 2024, emphasizing the company’s resilience and adaptability in navigating industry challenges.
Looking ahead, Spotify anticipates continued growth, targeting 239 million premium subscribers and aiming for a monthly user base of 618 million in the current quarter, underscoring its confidence in sustaining momentum and driving future success.