Spotify financial results keep a steady beat going as users rise

On February 6th, Spotify announced their Q4 and full year financial results for 2023.

The company reported some groovy figures, including total revenue up 16% year-on-year at €3.7 billion and €68 million in adjusted operating profit, which it said was “more than double the third quarter as the business continues momentum towards sustainable growth and profitability.”

Exceeding guidance

In a statement released before markets opened in the US today, Spotify said that:

The company's cash flow was also moving at a good pace, with gross margin up 26.7% in Q4, and up 140basis points year-on-year.

Users get on up

Spotify’s monthly active users (MAU) grew 23% year-on-year to 602 billion users, marginally above the guidance figures anticipated in advance of the release.

Similarly, premium subscribers grew 15% in 2023 to 236 million, also marginally above guidance.

In Q4 alone, net additions of 10 million contributed to record full year of 31 million net additions – largely thanks to Spotify’s hugely successful ‘Spotify Wrapped’ festive season campaign which drew more than 225 million users alone a 40% year-on-year increase in engagement.

Layoffs help bottom line

However, the company is still making a loss rather than a profit – especially because of startup costs of expensive projects like its new audiobooks offering.

The company said in its earnings that its operating loss of €75 million in Q4 was “more than offset” by its recent round of employee layoffs.