Spotify has published its Q4 2022 results.
Premium (Paying) Subscribers
The streaming giant ended the year with 205 million premium subscribers by adding 10 million net premium subscribers in Q4 of 2022. This means it enjoyed a 14% YoY growth in premium subscribers, which is 3 million above Spotify’s guidance.
According to Spotify, this growth was achieved via household plans and promotion intake.
Despite losing 2 million paying subscribers from its exit in Russia, Spotify’s net subscriber growth for 2022 was 25 million. The company claims that its guidance for premium subscribers growth was surpassed in all regions, and the leader of this growth was in its Latin America region.
Monthly Active Users (MAU)
In terms of Monthly Active Users (both paying and ad-supported users), a 20% YoY growth was experienced, bringing it to 489 million at the end of Q4 2022.
This growth meant 33 million net MAUs were gained, which is 10 million above its guidance (the company’s largest-ever Q4 MAU growth), and a total of 83 million MAUs were added in 2022. Spotify forecasts its Q1 2023 growth end to reach 500 million MAUs.
According to Spotify, its MAU performance in Q4 was led by India and Indonesia (‘Rest of World’ region) due to “successful marketing campaigns and OEM strength.”
Its 8th annual ‘Wrapped’ campaign and “stronger performance around the holiday season” also took credit for its MAU growth across nearly all regions.
The streaming company also admitted that a “strong [MAU] growth amongst Gen Z listeners” was also observed. The users that engaged its Wrapped feature in 2022 grew by 30% YoY in 111 markets.
Finance
A €3.2 billion revenue was generated in Q4 2022. An 18% YoY at constant currency. The revenue was above expectations or forecasts.
- Premium Subscribers’ revenue was €2.7 billion in Q4 2022. An 18% YoY at constant currency.
- Ad-Supported Users’ revenue was €449 billion in Q4 2022. A 14% YoY at constant currency, led by Podcasting gains. This revenue accounted for 14% of Spotify’s total revenue.
According to Spotify, its Gross Margin of 25.3% was above its guidance, which “came primarily as a result of lower-than-expected spend on new podcast content investments and broad-based music favourability”.
Profitability
The streaming company posted an operating loss of €231 million for Q4 2022, which according to Spotify, is a reflection of its “higher personnel costs primarily due to headcount growth and higher advertising costs”.
The company reduced its workforce base by “about 6% across the company” (500 jobs) a week before publishing its Q4 reports. Dawn Ostroff, Spotify’s Chief Content Officer, is set to leave the company soon.
