Losses mount at Spotify as costs jump
By Abigail Townsend
Date: Tuesday 31 Jan 2023
(Sharecast News) - Spotify fell deeper into the red in the fourth quarter, the music streaming service confirmed on Tuesday, as costs mounted.
The Stockholm-headquartered firm, which is listed in New York, saw revenues rise 18% year-on-year in the last three months of the year, to €3.17bn, or by 12% on a constant currency basis, which was in line with estimates.
Total monthly active users (MAU) also increased, up 20% year-on-year to 489m, while premium subscribers, who pay for the service, jumped 14% at 205m.
But fourth-quarter net losses widened to €270m from €39m a year previously, after operating costs jumped 44%. Spotify said personnel costs had risen as the headcount grew, although it was also hit by increased advertising costs and foreign exchange headwinds.
The company noted: "Revenue growth, excluding the impact of changes in foreign exchange, was ahead of expectations.
"Looking back on 2022 in its entirety, we are pleased with our overall results. Each year presents certain challenges and opportunities, and over the past 12 months, we largely delivered on our internal goals."
Spotify expects to add around 11m net new MAU during the first quarter of 2023, and 2m net new premium subscribers.
Total revenues are forecast to come in at €3.1bn, up from €2.67bn a year previously, assuming around "100 bps tailwind to growth year-on--year due to favourability in foreign exchange rates". The operating loss is expected to be €194m.
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