Spotify hits 205 million premium subscribers, but financial losses swell

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 mentioned it now has 205 million premium (paying) subscribers. That is up from 180 million premium subs within the year-ago quarter – a 14 p.c 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 p.c in comparison with final quarter’s 456 million month-to-month energetic customers. Spotify famous continued energy in multi-user premium plans.

Regardless of the beneficial properties, 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 progress and better promoting prices for the losses. The influence of latest acquisitions resembling 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 p.c or roughly 600 staff. Like different tech leaders, Spotify expanded its workforce too shortly throughout the pandemic. Ek took full duty for the misstep, noting that he was too formidable in investing forward of income progress.

Spotify’s spectacular person beneficial properties seemingly outweighed the mounting losses, a minimum of within the eyes of buyers. Shares in Spotify are up over 10 p.c on the information, at the moment buying and selling at $110.15 as of this writing. That’s removed from Spotify’s all-time excessive of almost $365 per share in February 2021 however is a step again in the precise route.

Seeking to Q1 2023, Spotify is anticipating to achieve 207 million premium subscribers, 500 million whole 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