Updated February 6th, 2024 at 17:08 IST
Spotify reports growth in monthly active users, subscribers
Spotify has implemented price adjustments for subscribers and undergone significant workforce reductions to bolster profitability and operational efficiency.
- 2 min read
Spotify user base grows: Spotify disclosed fourth-quarter metrics that surpassed expectations, reporting growth in monthly active users and subscribers across all regions. The company also expressed optimism regarding revenue and profitability prospects for the current year.
Expanding beyond music streaming, Spotify has diversified into podcasts and audiobooks as part of its strategy to achieve a user base of 1 billion by 2030. Alongside these initiatives, Spotify has implemented price adjustments for subscribers and undergone significant workforce reductions to bolster profitability and operational efficiency.
In the fourth quarter, the number of monthly active users surged by 23 per cent to 602 million, surpassing both Spotify's guidance and analysts' projections of 601.33 million. Premium subscribers, constituting a substantial portion of the company's revenue, increased by 15 per cent to 236 million, exceeding estimates of 235.1 million based on IBES data from LSEG.
Forecasts for the current quarter anticipate premium subscribers to reach 239 million, exceeding estimates of 238.3 million. However, Spotify's projections for the first quarter fall short of Wall Street expectations for total users and revenue.
The company anticipates first-quarter monthly users to reach 618 million, slightly below estimates of 618.8 million, with revenue projected to reach 3.6 billion euros ($3.86 billion), missing expectations of 3.64 billion euros.
Despite posting a fourth-quarter operating loss of 75 million euros, an improvement from the loss of 231 million euros in the same period last year, Spotify initially forecasted a wider loss due to charges related to the recent round of layoffs announced in December.
Fourth-quarter revenue increased by 16 per cent to 3.67 billion euros, albeit falling short of estimates of 3.72 billion euros, largely attributed to foreign exchange losses.
Notably, ad-supported revenue experienced a 12 per cent growth from the previous year, driven by a resurgence in music advertising revenue and robust double-digit growth in podcast advertising.
(With Reuters inputs)
Published February 6th, 2024 at 17:08 IST