Spotify Hits 205 Million Paid Subscribers

Spotify packed on 10 million Premium customers in the last three months of 2022 to stand at 205 million, topping its previous guidance. Variety reports: The growth of its paid subs, up 14% year over year, was "aided by promotional intake and household plans," the company said. Overall, the streamer gained 33 million total monthly active users in the fourth quarter -- a record high -- to reach 489 million (free and paid), up 20% year over year. Amid signs of a flagging economy, Spotify posted 3.17 billion euros in revenue, up 18% from the year-earlier period an in-line with guidance, and a net loss of 270 million euros (versus a net loss of 39 million euros in Q4 2021). Operating loss of 231 million euros for Q4 was better than its projection of -300 million euros. "We ended 2022 with strong Q4 performance as nearly all of our [key performance indicators] surpassed guidance," Spotify said in its quarterly shareholder deck. The company said revenue growth, excluding the impact of changes in foreign currency exchange rates, was ahead of expectations. Meanwhile, Spotify's ad-supported revenue in Q4 grew 14% year over year, to 449 million euros, led by podcasting gains in the mid-30% range. The company's gross margin for the quarter was 25.3%, slightly above guidance "primarily as a result of lower-than-expected spend on new podcast content investments" as well as "broad-based music favorability." Spotify last week cut 6% of its headcount, laying off about 600 employees. On the earnings call Tuesday, CEO Daniel Ek admitted that he had "overinvested" in Spotify's business, requiring the company to cut jobs. "I still believe it was the right call to invest, and I would do it again," the CEO said. "But things change, and the macro-environment has changed significantly in the last year. And in hindsight, I probably got a little carried away and overinvested relative to the uncertainty we saw shaping up in the market."

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