Spotify, the leading streaming platform, recorded an operating loss of €75 million in the final quarter of last year.
Despite this setback, the company reported that monthly active users and subscribers exceeded expectations.
This operating loss marked a return to the red for the streaming giant, following a period of cost-cutting measures which included a significant reduction in staff, amounting to approximately 1,500 employees, equivalent to 17 per cent of its global workforce. Spotify attributed the operating loss being better than expected to updated guidance issued in response to the job cuts and associated expenses.
The Stockholm-based company also cited start-up costs related to its foray into audiobooks as contributing factors to the losses. Beyond its core music streaming business, Spotify has expanded into podcasts and audiobooks as part of its strategy to achieve a user base of one billion by 2030. Additionally, the company has implemented price increases.
Despite the operating loss, Spotify saw a 23 per cent increase in monthly active users, reaching 602 million in the fourth quarter, surpassing both the company’s guidance and analysts’ forecasts. Premium subscribers, who drive the majority of the company’s revenue, grew by 15 per cent to 236 million, also exceeding expectations. However, revenue rose by 16 per cent to €3.67 billion, slightly missing estimates of €3.72 billion due to foreign exchange losses.
For the current quarter, Spotify anticipates premium subscribers to reach 239 million, surpassing estimates. However, its forecast for monthly active users fell below Wall Street expectations, as did its revenue projection.
In terms of content performance, Taylor Swift emerged as Spotify’s top-performing artist of 2023, amassing over 26.1 billion global streams, while Miley Cyrus’s “Flowers” claimed the title of the top song of the year. The Joe Rogan Experience secured the position of the top podcast.