Spotify’s premium subscriber base grows, but so do its financial losses. Spotify reported 205 million premium (paying) subscribers in its fourth quarter 2022 report, which was just released. This is up from 180 million premium subscribers in the previous quarter, a 14% increase, and 195 million in the third quarter.
Monthly active users increased by 7% quarter over quarter to 489 million, up from 456 million in the previous quarter. The music streaming giant reported that multi-user premium plans remained strong.
Despite the gains, financial losses continue to accumulate. The company’s revenue in the fourth quarter was 3.17 billion euros ($3.44 billion), but the company lost 270 million euros ($293 million). In comparison, the company’s net loss in the fourth quarter of 2021 was only 34 million euros ($37 million).
Spotify attributed the losses to increased personnel costs due to headcount growth and higher advertising costs.
The impact of recent acquisitions such as Heardle, Chartable, and Podsights was also considered. Spotify CEO Daniel Ek confirmed earlier this month that the company would reduce its headcount by about 6%, or approximately 600 employees. Spotify, like other tech leaders, overexpanded its workforce during the pandemic. Ek accepted full responsibility for the blunder, claiming that he was overly ambitious in investing ahead of revenue growth.
Spotify’s impressive user growth appears to have outweighed the company’s mounting losses, at least in the eyes of investors. Spotify shares are up more than 10% on the news and are currently trading at $110.15 as of this writing. That is still a long way from the music streaming giant’s all-time high of nearly $365 per share in February 2021, but it is a step in the right direction.
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