In a strategic twist, Spotify reports robust fourth-quarter performance, surpassing expectations in both monthly active users and premium subscribers. The music streaming giant, amid its foray into podcasts and audiobooks, aims to reach one billion users by 2030. Despite a recent wave of layoffs and subscription price hikes, Spotify’s revenue and profitability outlook for the year appears promising.
The fourth quarter saw a 23% increase in monthly active users, reaching 602 million, outshining both Spotify’s guidance and analysts’ predictions. Premium subscribers, crucial for revenue generation, rose by 15% to 236 million, exceeding estimates. The company projects a further rise, expecting 239 million premium subscribers in the current quarter.
However, the first-quarter forecast falls slightly below Wall Street expectations, with total users and revenue missing the mark. Spotify’s monthly user forecast for Q1 is 618 million, just below estimates. Revenue is expected to hit 3.6 billion euros, slightly under expectations of 3.64 billion euros.
Despite a reported operating loss of 75 million euros in the fourth quarter, Spotify’s strategic layoffs in December aimed at bolstering profits and efficiency appear to be paying off. The actual loss is lower than the previously forecasted range of 93 million to 108 million euros. Revenue climbed 16% to 3.67 billion euros, although it missed estimates due to foreign exchange losses.
Ad-supported revenue saw a 12% growth, with both music and podcast advertising contributing to the positive trajectory. Spotify’s resilience in the face of challenges highlights the successful navigation of strategic shifts, emphasizing a promising future for the streaming giant.