Spotify stock is on the upswing as more users tune in |
STOCKHOLM/LOS ANGELES, 31 january (Reuters) – Spotify Technology SA ( SPOT.N ) forecast on Tuesday that it will hit 500 million listeners in the current quarter as it reported fourth-quarter results that beat expectations for both active users and subscribers. subscribers.
The company’s shares rose 9% in pre-bell trading.
After investing heavily in 2022 to build its podcast and audiobook business, the company is trying to rein in operating expenses, which grew at twice the rate of revenue last year, by cutting 600 jobs and cutting other costs.
“We always knew that 2022 was going to be an investment year, and 2023 was going to be a year where we would slow down investments, and therefore operating costs, while revenues continued to grow,” Chief Financial Officer Paul Vogel said in an interview.
Monthly active users rose to 489 million in the quarter, beating Spotify’s management and analysts’ forecasts of 477.9 million, helped by marketing campaigns and growth in India and Indonesia.
Premium subscribers, which make up the bulk of the company’s revenue, rose 14% to 202.3 million to 205 million, according to IBES data from Refinitiv.
Half billion in addition to the user forecast, Spotify expects the number of premium subscribers to reach 207 million in the current quarter and 3.1 billion euro (3.35 billion dollars) expects to make a profit. Analysts had expected 202 million subscribers and 3.05 billion euros in revenue.
“The first quarter is always the smallest quarter in terms of user growth. Our marketing campaign is not at the same level as we were in Q2-Q4,” said CEO Daniel Ek.
Spotify last year to get 1 billion users by 2030 and every year 100 billion dollars plans to generate income. It also promised high-margin returns from a costly expansion into podcasts and audiobooks.
The company has invested more than $1 billion to build its podcast business, which now has more than 4 million titles. But these investments reached the gross margin.
In the fall, Spotify will release 11 original podcasts from Parcast and Gimlet, the two studios the company acquired in 2019 cancellation by focusing on original and exclusive shows that attract listeners, such as Warner Bros. “Batman Unburied” or the thriller “Caso 63”.
Dawn Ostroff, head of content and advertising who helped build Spotify’s podcast business, was also leaving the company after four years.
Ek said he has no plans to reshape the podcast business after leaving.
“Spotify will double down on things that work well and stop doing things that don’t,” he said. “We’re more focused on efficiency.”
In 2023, the company expects revenues to start growing faster than rising operating expenses due to increased headcount and higher advertising costs.
($1 = 0.9246 euros)
Reporting by Supantha Mukherjee in Stockholm and Dawn Chmielewski in Los Angeles; Edited by Christina Fincher and Emelia Sithole-Matarise
Our standards: Thomson Reuters Trust Principles.
2023-01-31 18:21:23
Source – reuters
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