In its Q4 2022 financial report, Spotify revealed a blend of positive and negative news. On the optimistic side, the streaming platform outstripped expectations and reached a milestone of 205 million paying customers, thus becoming the first of its kind to surpass the 200 million mark.
Its MAU (monthly active users) augmented to 489 million, including both subscribers and users of the ad-supported tier. In comparison, at the end of Q3 2021, Spotify had 195 million premium tier subscribers and 456 million MAU.
But there is also some bad news right around the corner. Spotify’s Chief Financial Officer Paul Vogel said in an interview: “We always knew that 2022 would be an investment year and 2023 will be a year where we would slow down the investments and thereby operating expenditure while revenue keeps on climbing.”
Spotify’s incorporation of podcasts and audiobooks led to greater expenses, causing fourth-quarter losses to escalate from €39 million in 2021 to €270 million in 2022. This was because of higher advertising outlays and the hiring of new employees. The company recently declared a 6% decrease in its personnel of roughly 600 people.
Despite this, the corporation’s overall revenue for the year was €3.2 billion, representing a year-over-year growth of 18%, with €2.7 billion coming from premium memberships. Foraying into the podcasting industry appears to be a wise decision, as it resulted in a rise in ad-supported revenue to €449 million for the quarter.
The company’s forecasts anticipate its user base to surpass 500 million by March and its premium subscribers to reach 207 million. Daniel Ek, the CEO, declares that the initial quarter is usually the slowest for the company’s expansion.
This year the aim is to diminish the operating loss and the objective for the next 10 years is to reach 1 billion customers by 2030. A noteworthy feature is that the 8th yearly Spotify Wrapped campaign noticed a 30% year-over-year rise, gathering 150 million monthly dynamic clients across 111 markets.
