In short: Spotify’s premium subscriber base continues to swell however so do the monetary losses. In its just-released fourth quarter 2022 report, Spotify stated it now has 205 million premium (paying) subscribers. That is up from 180 million premium subs within the year-ago quarter – a 14 % improve – and 195 million within the third quarter.
Month-to-month energetic customers (which mix each premium and advert supported customers) reached 489 million, 1 / 4 over quarter improve of seven % in comparison with final quarter’s 456 million month-to-month energetic customers. Spotify famous continued power in multi-user premium plans.
Regardless of the positive factors, the monetary losses proceed to pile up. Spotify generated 3.17 billion euros ($3.44 billion) in income within the fourth quarter however posted a web lack of 270 million euros ($293 million). For comparability, the corporate’s web loss was simply 34 million euros ($37 million) within the fourth quarter of 2021.
Spotify cited elevated personnel prices on account of headcount development and better promoting prices for the losses. The affect of latest acquisitions akin to Heardle, Chartable and Podsights additionally factored into the equation.
Earlier this month, Spotify CEO Daniel Ek confirmed the corporate can be lowering its headcount by about six % or roughly 600 workers. Like different tech leaders, Spotify expanded its workforce too rapidly through the pandemic. Ek took full accountability for the misstep, noting that he was too formidable in investing forward of income development.
Spotify’s spectacular consumer positive factors seemingly outweighed the mounting losses, at the least within the eyes of traders. Shares in Spotify are up over 10 % on the information, at present buying and selling at $110.15 as of this writing. That’s removed from Spotify’s all-time excessive of practically $365 per share in February 2021 however is a step again in the precise course.
Trying to Q1 2023, Spotify is anticipating to achieve 207 million premium subscribers, 500 million complete month-to-month energetic customers and income of three.1 billion euros with an working lack of 194 million euros.
Picture credit score: Suvan Chowdhury, Victoria Akvarel