Spotify Q4 2023 Earnings: Revenues Up 16% as Monthly Users Reach 602 Million

Spotify’s revenues for 2023 grew 16% year over year, reaching 3.67 billion euros ($4.05 billion), as a surge in both monthly active users (up 23% to 602 million) and premium subscribers (up 15% to 236 million) beat expectations.

After a third quarter in which the streaming company turned a profit for the first time in a year, however, its operating loss was again in the red, at 75 million euros ($82.7 million), albeit better than its guidance; Spotify says that excluding one-time charges its operating profit would have been 68 million euros ($75 million), more than double the 32 million euros ($34 million) in profit it generated in the third quarter of 2023.

Spotify added 10 million subscribers in the fourth quarter, beating expectations by 1 million, and added 31 million for the year. Its 602 million monthly active users also were 1 million ahead of guidance, and represented 28 million additional users in Q4, which it said was the second-largest Q4 add in the company’s history. It finished 2022 with 205 million subscribers and 489 million monthly average users.

Spotify went through a series of cost-cutting moves in the past year, including laying off 17% of staff in December — its third round of layoffs in a year — as it seeks continued profitability, as well as instituting its first price hike on its standard premium plans in over a decade. That helped the company into the black in the third quarter, and Spotify said today, “With revenue and profitability trends both inflecting favorably heading into 2024, we view the business as well positioned to deliver improving growth and profitability.”

Those one-time charges included €143 million in net severance related and real estate optimization charges, the company said.

Spotify also included some numbers from its hugely-popular year-end Wrapped campaign, saying that it drew more than 225 monthly average users, with engagement up 40% year over year in 170 markets; and said that it added 200,000 audiobooks onto the platform this year, a point of emphasis of late.