Spotify announces record subscriber growth for 2023 and sees ‘improving growth and profitability’ after axing thousands of staff
Spotify on Tuesday announced fourth-quarter monthly active users and subscribers ahead of expectations, with growth in all regions and “revenue and profitability trends both inflecting favorably” heading into 2024.
“We view the business as well positioned to deliver improving growth and profitability,” the company said in a statement.
The company has invested in podcasts and audiobooks to drive up its user base, with a goal of 1 billion by 2030, while raising subscription prices and laying off thousands of staff to increase profits.
The moves appeared to pay off with monthly active users rising 23 percent year-on-year in the fourth quarter to 602 million, beating its guidance and alaysts’ forecasts by about 1 million.
Premium subscribers rose 15 percent year-on-year to 236 million, with net additions about 1 million ahead of guidance.
Net subscriber additions of 10 million contributed to a record full-year net additions of 31 million, the company said.
Spotify said it expects premium subscribers to reach 239 million for the current quarter, above estimates of 238.3 million.
Total revenue grew 16 percent year-on-year to 3.7 billion euros (£3.2bn), missing analysts’ estimates of 3.72bn euros due to foreign exchange losses.
First-quarter revenues are also projected to fall below expectations.
Chief executive Daniel Ek told Reuters the company planned moves price increases as it increased its focus on the bottom line.
That follows heavy investments into its podcast business, which it pulled back from late last year about a month before announcing it would cut 17 percent of its workforce.
Those investments saw podcast advertising grow by double digits in the December quarter.