Spotify Beats Estimates, But Losses Soar

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Spotify beats analysts’ estimates on user and subscriber growth, but podcast investment strategy sees ballooning losses

Spotify on Tuesday reported financial results that beat analysts’ expectations on active users and subscribers, but detailed skyrocketing losses due to heavy investment into areas such as podcasts.

The Swedish company said it had made a fourth-quarter loss of 270 million euros (£237m), up from 39m euros in the same period a year earlier, as operating costs grew 44 percent.

Spotify recently said it would fire hundreds of staff after chief executive Daniel Ek admited the firm had been “too ambitious” with expenditures during the pandemic, similar to other firms such as Amazon that are also cutting jobs.

But the company’s number of monthly active users rose to 489 million during the quarter, beating its guidance and analysts’ forecasts of 477.9 million.

spotifyPremium growth

The premium subscribers who make up most of the firm’s revenues grew 14 percent to 205 million, higher than Refinitiv estimates of 202.3 million.

The growth resulted from marketing campaigns and new users in countries such as India and Indonesia.

Spotify forecast users would reach 500 million in the current quarter and that premium subscribers would reach 207 million.

Quarterly revenue was 3.2bn euros, higher than analysts’ estimates of 3.16bn euros.


The company’s spending grew at twice the rate of its revenue in 2022, Ek said, as it invested heavily in its podcast business.

Spotify pays about 70 percent of its revenues to music rights holders, and has invested in original podcast content as a way of reducing its dependence on music.

But the company signalled it was shifting away from its original content strategy and would instead look to attract popular podcasters to use its platform in exchange for a share of their advertising revenues, a model similar to that of YouTube.

Spotify said it would cut 6 percent of its staff, or about 600 staff members, and that Dawn Ostroff, who had been head of the podcast unit, would be leaving after more than four years.