Spotify beats expectations with strong fourth-quarter user growth, focuses on podcasts and profitability

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    6th February 2024 – (Stockholm) Spotify, the popular music streaming platform, announced on Tuesday that its fourth-quarter monthly active users and subscriber numbers exceeded expectations. The company reported growth in all regions and expressed optimism about revenue and profitability trends for the coming year.

    In its pursuit of expanding its user base to reach one billion by 2030, Spotify has made strategic moves into the podcast and audiobook space. Additionally, the company has taken measures to boost profits and improve efficiency, including raising subscription prices and implementing workforce reductions.

    During the fourth quarter, the number of monthly active users increased by an impressive 23 per cent to reach 602 million, surpassing both Spotify’s own guidance and analysts’ forecasts, which had predicted 601.33 million users.

    Premium subscribers, who contribute significantly to Spotify’s revenue, grew by 15 per cent to reach 236 million. This figure exceeded estimates of 235.1 million, based on IBES data from LSEG.

    For the current quarter, Spotify anticipates a further increase in premium subscribers, projecting a total of 239 million, which surpasses analysts’ estimates of 238.3 million.

    However, Spotify’s first-quarter forecast fell short of Wall Street’s expectations for total users and revenue.

    The company’s projected number of monthly users for Q1, at 618 million, missed estimates of 618.8 million. Similarly, Spotify expects its revenue to reach €3.6 billion (US$3.86 billion), slightly below the anticipated €3.64 billion.

    In terms of financial performance, Spotify reported a fourth-quarter operating loss of €75 million, significantly reduced from the €231 million loss reported in the same period the previous year.

    The company had previously projected an operating loss of between €93 million and €108 million for the fourth quarter due to charges associated with the recent round of layoffs announced in December.

    While revenue increased by 16 per cent to €3.67 billion, it fell short of estimates of €3.72 billion, primarily due to foreign exchange losses.

    Spotify also observed a 12 per cent growth in ad-supported revenue compared to the previous year, driven by a rebound in music advertising revenue. Additionally, podcast advertising recorded double-digit growth, further contributing to the company’s overall revenue.