Deezer Breaks Even With 12% Revenue Jump, Beating Guidance

French streaming platform Deezer reported on Tuesday it had 7 million euros ($7.6 million) in free cash flow for the fiscal year 2024, having achieved break-even status for the first time in its nearly 18-year history last fall.

Founded in August 2007, Deezer has struggled to build its brand outside of its home market in France. But in recent years, it has raised prices and expanded its subscriber-base by being the streaming platform powering German broadcaster RTL, American speaker company Sonos and Latin America’s version of Amazon, Mercado Libre.

“This is an exciting milestone, and it puts Deezer in control of its own destiny,” Deezer Chief Financial Officer Carl de Place tells Billboard on becoming cash-flow positive. “We have been able to exceed our guidance and to deliver 11.8% growth thanks to a nearly 10% increase in direct revenue from France, and the revenue from our partnerships business, which grew at 24% year over year.”

A growing number of streaming platforms have raised prices in recent years, and Deezer was at the forefront having raised subscription prices in France, its largest market, in January 2022 and other markets later in the year. After Apple, Amazon, YouTube and Spotify all followed with their own increases, Deezer raised its prices again in September 2023.

The company reported revenue increased 12% to 542 million euros ($590.8 million), above their 10% growth target. Direct revenue in France increased 9.7% from the year ago period thanks to a 4.3% increase in subscriber revenue and greater average revenue per user (ARPU). Revenue from partners white labeling its services rose 24% year over year.

While not a profitable fiscal year, the company said it saw strong improvement. Adjusted earnings before interest tax depreciation and amortization (EBITDA) for the full year was negative 4 million euros ($4.4 million), and a 21.2% increase in its adjusted gross profit to 134 million euros ($146 million), equal to a 24.7% margin. The company had 62 million euros ($67.6 million) cash in its reserves at year end.

The company plans to double-down on its brand partnership strategy, while maintaining focus on further growing its presence in France with new features allowing users to customize their feed on the streaming platform and opportunities to more directly interact with artists, de Place says.

“Profitable growth is what you should expect going forward. We are prepared to continue to deliver positive free cash flow, to reinvest in the company and also add to our reserves,” de Place says.