Spotify reported a mix of good and bad news in its latest quarterly earnings report. The good news was that Spotify's paid users reached 236 million, up 4% from the previous quarter. Subscribers in the free, ad-funded tier grew even more, up 5% to 602 million.
The bad news was that the company, which had posted a rare quarterly profit in the third quarter, returned to unprofitable business. in the fourth quarter …
The number of paid users of Spotify has reached 236 million
Today the company shared numbers, starting with positive ones.
The number of monthly active users increased by 23%. Year on year to 602 million and 1 million above forecast. The net increase of 28 million was the second-largest fourth-quarter net increase in our history. The number of subscribers grew by 15% compared to last year to 236 million. Net gains were 1 million higher than forecast. Q4 net additions of 10 million contributed to a record net addition of 31 million for the full year.
Revenue was also up 16% year-over-year, but third-quarter profit was 65 million euros. turned into a loss of 70 million euros in the fourth quarter.
The company did put a positive spin on this, and there may be some reason for this.
Operating loss for the quarter was EUR (75) million, better than our updated forecast. Excluding one-off charges, we delivered adjusted operating profit of €68 million, more than doubling the third quarter, as the business continues to move towards sustainable growth and profitability.
Much of this & #8220;one-time payments” refer to the costs of three rounds of layoffs the company carried out last year in an attempt to limit its losses.
The battle with Apple continues
The company is currently in a battle with Apple over changes to the App Store that the company is making to comply with European antitrust laws. Last month, Spotify shared a preview of what they hoped would be the ability to offer premium subscriptions within the app, which would likely increase conversions compared to the current experience where the app can't even tell you how to subscribe.
The company called Apple's plans “outrageous.” and called on the European Union to “act quickly”; reject the iPhone manufacturer's proposed version of compliance with the Digital Markets Act. Apple responded by saying it helped Spotify become “the most successful music streaming app in the world.” – depending on how you define “success”, Probably.
Apple has long since stopped reporting Apple Music subscriber numbers. Its last update was back in 2019, when their number was 60 million.
Photo by Thibault Penin on Unsplash
