Spotify has released its financial report for the last quarter of 2022, and there’s some good news and some bad news. First, the good news. It exceeded expectations and had 205 million paying subscribers by the end of the year, making it the first streaming service to cross the 200 million mark.
Its monthly active users (MAU) reached 489 million, including subscribers using the ad-supported tier. For comparison, Spotify had 195 million premium tier subscribers at the end of last year’s third quarter and 456 million MAUs. The addition of 33 million MAUs was Spotify’s largest growth ever in the fourth quarter.
Now for some bad news. “We always knew 2022 was going to be an investment year and 2023 was going to be a year where we slowed down our capex and then our operating expenses as revenue continued to climb,” Chief Financial Officer Paul Vogel said in an interview. .
The company expanded into podcasts and audiobooks, which incurred new costs. This led to the fourth quarter loss from €39 million in 2021 to €270 million last year. This has been attributed to rising advertising costs and the hiring of new employees, although last week Spotify announced it would be reducing its workforce by 6%, around 600 people.
Breakdown by Region: Monthly Active Users • Premium Subscribers
Total revenue for 2022 was €3.2 billion, up 18% year-on-year. of that 2.7 billion euros came from premium subscriptions. Going into the podcasting business is proving to be a wise decision as it’s cited as one of the reasons Spotify’s ad-supported revenue soared to €449 for the quarter.
The company expects it to surpass half a billion users by March and grow its premium subscribers to 207 million (CEO Daniel Ek explains that Q1 is always the smallest growth quarter for the company).
Looking forward, the goal for this year is to reduce operating loss. The goal for the next few years is to reach 1 billion users by 2030.
Here’s an interesting note: The eighth annual Spotify Wrapped campaign attracted 150 million MAU, up 30% year-over-year, and covered 111 markets.
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