Updated February 6th, 2024 at 19:24 IST
Spotify's records 23% jump in Q4 FY24 user base to 602 million
Spotify's premium subscribers, who account for most of the company's revenue, rose by 15 per cent to 236 million
Growth Boost: The Stockholm-based music platform Spotify on Tuesday reported fourth-quarter monthly active users and subscribers ahead of expectations as it grew in all regions.
The revenue and profitability of the firm also looked favourable this year, sending its shares up 8 per cent.
The top music streaming company has ventured into podcasts and audiobooks as it seeks to expand its user base to 1 billion by 2030. It has also raised prices for its subscribers and laid off thousands of employees to boost profits.
The number of monthly active users rose by 23 per cent to 602 million in the fourth quarter, beating Spotify's guidance and analysts' forecasts of 601.33 million.
Premium subscribers, who account for most of the company's revenue, rose by 15 per cent to 236 million, topping estimates of 235.1 million, according to IBES data from LSEG.
However, quarterly revenue, which rose 16 per cent to 3.67 billion euros ($3.94 billion), missed estimates of 3.72 billion as it took a hit from foreign exchange losses. The company's first-quarter revenue is also expected to fall below expectations.
"We have plenty of levers to pull, including price increases, so you will see us work with all of these levers at various times and in various markets," said CEO of Spotify, Daniel Ek.
"We are now a lot more focused on the bottom line as well," he said.
Spotify has also been investing heavily in its podcast business, including signing hosts with big followers such as Joe Rogan, and podcast advertising grew by double digits in the quarter.
"We never stopped investing in it, but from a financial point of view what we did say was that podcasting was a drag on the business in 2023," he added.
"And that we would turn it around and achieve consistent profitability on the podcasting side in 2024 and I feel really good about our ability to do just that," Daniel Ek said.
The company expects current-quarter premium subscribers to reach 239 million, above estimates of 238.3 million.
However, the first-quarter forecast was below Wall Street expectations for total users and revenue.
Spotify's monthly user forecast for the quarter of 618 million undershot estimates of 618.8 million. It expects operating income of 180 million euros in the current quarter after posting a fourth-quarter operating loss of 75 million euros.
Published February 6th, 2024 at 19:24 IST
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