Music

Spotify Adds Highest-Ever 35 Million Monthly Users In Fourth Quarter

Spotify added 35 million monthly active users in the fourth quarter last year — the most ever in a single quarter — bringing the total number of people streaming on the Swedish music and audiobook platform to 675 million, the company reported on Tuesday.

Premium or paying subscribers totaled 263 million as of the end of last year, an 11% increase over the prior year, and ad supported subscribers rose 12% to 425 million.

Related

The company has been on a cost-cutting mission, including letting go of about 17% of its workforce last year, said 2024 was its first full year of profitability. It reported that quarterly revenue of 4.2 billion euros ($4.34 billion), up 16%, “was ahead of plan,” thanks to favorable foreign exchange rates and subscriber revenue.

Those cost cuts helped cut Spotify’s expenses by 16% from last year to 891 million euros ($920.48 million), while revenue from premium subscribers rose 17% to 3.7 billion euros ($3.18 billion). Revenue from ad supported listeners rose 7% to 537 million euros ($596 million). Average revenue per user rose 5% year over year to 4.85 euros ($5.01).

Spotify’s gross margin — a key measure which strips the cost of sales out of the company’s revenue — came in above target at 32.2%, compared to 26.7% a year ago. Gross profit totaled 1.37 billion euros ($1.42 billion), and the operating income rose to 477 million euros ($495 million).

The first quarter they expect first quarter revenue to hold flat at 4.2 billion euros ($4.34 billion), as subscribers are expected to rise just 2 million in what is typically a slower-growth quarter for Spotify.

Late last month (Jan. 26), Spotify and Universal Music Group struck a new deal on recorded music and publishing royalty rates that included a first-ever direct agreement between Spotify and Universal’s publishing arm.

On a call discussing earnings, Spotify executives declined to answer questions about the specifics of the deal or the financial impact it may have on both companies.

Spotify chief executive Daniel Ek described the agreement as a natural part of his company’s evolution.

“The first 16 years of the company all we were focused on was [achieving] meaningful scale. Through cost reductions and pure monetization we gained profitability,” Ek said on a call with analysts. “Like most companies more scale begets more profitability. We believe this sets us up for very strong growth. And if we’re growing very nicely our label partners … will too.”

Spotify’s Q4 Topline Results:


Monthly active users were up 12% to 675 million, contributing to the addition of 35 million MAUs for the quarter — a new record
Premium subscribers rose 11% to 263 million, capping a year that added 27 million paid users
Ad-supported users rose by 12% to 425 million from the year ago period
Total revenue rose 16% to 4.24 billion euros ($4.34 billion)
Revenue from premium subscriptions rose by 17% to 3.7 billion euros ($3.18 billion). Ad-supported revenue jumped 7% to 537 million euros ($596 million)
Operating income of 477 million euros ($495 million), up from losses a year ago, which were due to one-time charges


Powered by Billboard.

Related Articles

Back to top button