For the fourth quarter of the final 12 months, Spotify reported 3.17 billion euros ($3.43 billion) in income, which is eighteen% up from the year-earlier interval.
Business media companies supplier Spotify Technology S.A. (NYSE: SPOT) has released its This fall 2022 earnings report. The corporate has beat expectations, delivering robust income and vital development in its subscriber base. Following the This fall 2022 earnings report, Spotify shares closed 12.72% up yesterday, at $112.72.
This fall 2022: Highlights
For the fourth quarter of the final 12 months, Spotify reported 3.17 billion euros ($3.43 billion) in income, which is eighteen% up from the year-earlier interval. The quantity displays the premium income development of 18% in comparison with the final 12 months in addition to a 14% development in ad-supported income. In accordance with Spotify, the expansion was pushed by the subscriber base growth and podcasting.
Spotify stated:
“On a global basis, our music advertising revenue grew mid-single digits year-over-year, reflecting double-digit year-over-year growth in impressions sold, partially offset by softer pricing due to the current macroeconomic environment. Podcast revenue grew in the mid-30 percent range year-over-year, reflecting healthy double-digit year-over-year growth in impressions sold and pricing. The Spotify Audience Network saw healthy double-digit quarter-over-quarter growth in participating publishers, shows and advertisers.”
Additional, the music-streaming firm highlighted robust development in its person base. Specifically, the variety of its month-to-month energetic subscribers rose by 20% 12 months over 12 months to 489 million.
In the meantime, Spotify has additionally seen its loss widening from 39 million euros ($42 million) to 270 million euros ($292 million) because of elevated bills amid “higher personnel costs, primarily due to headcount growth, and higher advertising costs.”
Inside its cost-cutting measures, Spotify announced a plan to scale back its headcount by 6% (or 600 workers) only a week earlier than releasing the This fall 2022 report. One of many highest-profile departures was content material and advert enterprise chief Daybreak Ostroff who had been main Spotify’s push into podcasting over the previous 4 years.
2023 Outlook
Admitting that 2022 has been a difficult 12 months, Spotify stated that 2023 continues to be “subject to uncertainty.”
Spotify stated:
“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 and we are excited about the momentum we are building heading into 2023.”
As Spotify CEO Daniel Ek defined, the corporate will proceed shifting in the direction of its objectives in 2023, with shifting to concentrate on tightening its spending and changing into extra environment friendly.
This fall ‘22 $SPOT delivered great platform growth. We ended 2022 strongly despite a challenging year. Expect us to move faster with more intensity of effort, driving even greater efficiency in 2023. pic.twitter.com/rII7hHwRy1
— Daniel Ek (@eldsjal) January 31, 2023
For the first quarter of 2023, Spotify expects revenue of €3.1 billion and an operating loss of €194 million (including a €35 million-€45 million charge for severance-related expenses in Q1). As for the subscriber base, the company is looking to reach 500 million monthly active users in Q1, which would represent a net gain of 11 million, and 207 million Premium subscribers, implying 2 million net new subscribers in the quarter.
Notably, Wall Street analysts also expect a growth in Spotify subscribers. In May this year, the European Union will impose the Digital Markets Act, and one of the benefits for Spotify will be the ability to promote its cheaper subscription offers. The company will make the offers available outside Apple’s iPhone app.
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