Spotify has reported a significant surge in its user base, reaching 751 million monthly active users, an 11% increase from the previous year, with 38 million new users added in the fourth quarter alone.
The company’s paying subscribers have also seen a substantial rise, reaching 290 million, representing a 10% year-over-year growth. This expansion in the user base and subscriber count underscores Spotify’s continued dominance in the music streaming industry.
In terms of financial performance, Spotify recorded revenue totaling €4.53 billion ($5.39 billion), marking a 7% increase compared to the same period last year. The company’s subscription revenue grew by 8%, contributing to the overall revenue growth.
However, ad-supported revenue experienced a decline, decreasing by 4% to €518 million ($616.6 million). Despite this, the company’s gross margin improved by 83 basis points, reaching a record high of 33.1%. This improvement was attributed to increased ad sales for podcasts and music, highlighting the effectiveness of Spotify’s diversified content offerings.
Spotify’s “Wrapped” campaign was a major success, engaging over 300 million users and generating 630 million social media shares across 56 languages. The company also introduced new features on its free tier, including an AI DJ and AI-generated playlists, as well as the ability for users to exclude tracks from recommendations. These enhancements have contributed to user growth and retention.
The platform has continued to expand its offerings beyond music, incorporating podcasts and audiobooks into its content portfolio. Additionally, Spotify has launched in-app music videos and video podcasts, further enriching the user experience. Social features, such as group chats and music sharing, have also been implemented to foster user engagement and retention.
Users can now book concert tickets and explore song origins, adding a new layer of interactivity to the platform. The company has also increased subscription prices in the U.S. and Europe, while introducing new free tier features, including song search and selection, to attract users.
In a significant leadership change, Gustav Söderström and Alex Norström have assumed roles as co-CEOs, succeeding co-founder Daniel Ek, who previously led the company. Looking ahead, Spotify projects 759 million users and 293 million paying subscribers for the current quarter, indicating continued growth and expansion.
