Spotify announced on Tuesday that it exceeded expectations for monthly active users and subscribers in the fourth quarter, experiencing growth across all regions. The music streaming giant expressed optimism about revenue and profitability trends for the new year.
As part of its strategic expansion, Spotify has delved into the realms of podcasts and audiobooks, aiming to bolster its user base to an ambitious 1 billion by 2030. To enhance profitability and efficiency, the company has implemented price hikes for subscribers and undergone significant workforce restructuring, resulting in thousands of layoffs.
During the fourth quarter, the number of monthly active users surged by an impressive 23%, reaching 602 million, outpacing Spotify’s own projections and analysts’ forecasts of 601.33 million. Premium subscribers, a key driver of the company’s revenue, rose by 15% to 236 million, surpassing estimates of 235.1 million, as per IBES data from LSEG.
Looking ahead, Spotify anticipates an increase in current-quarter premium subscribers to 239 million, exceeding estimates of 238.3 million. While the company’s performance in the fourth quarter showcased strength and growth, its first-quarter forecast fell slightly below Wall Street expectations for total users and revenue.
The projection for monthly users in the first quarter stands at 618 million, slightly underestimating estimates of 618.8 million. Revenue expectations for the same period are set at €3.6 billion ($3.86 billion), missing the anticipated figure of €3.64 billion.
Despite these minor deviations from expectations, Spotify reported a fourth-quarter operating loss of €75 million, a significant improvement compared to the €231 million loss in the corresponding period of the previous year. The company’s strategic moves in diversifying content offerings and optimizing its operations underscore its commitment to long-term growth and sustainability in the competitive landscape of the streaming industry.