Home » Technology » Spotify posts another big operating loss, but growing subscribers

Spotify posts another big operating loss, but growing subscribers


According to Spotify’s Q4 earnings report, the company lost another $231 million in cash, but subscribers increased to 489 million.

As the company laid off 6% of its working staff, the results aren’t clear about the financial state of the company.

According to Daniel Ek, CEO of Spotify,

“I got a little sidetracked and over-invested relative to the uncertainties I perceived in the market in hindsight.”

“The gross margin side has been impacted by podcasting.” Investments have both succeeded and failed.

“Several performances met our expectations, while others fell short.”

As this was indicated by him as a symbol of growth because you first seek expansion before efficiency, in general, you will see that we place more of an emphasis on efficiency than pure development.

According to the company’s entire financial report, “Monthly Active Users net additions hit a quarterly record high of 33 million in Q4, 10 million above guidance.” Net additions to the subscriber base “significantly exceeded, exceeding projections by 3 million.”

However, the company lost money once again. Following a Q3 2022 loss of $228 million, the operational loss for Q4 2022 was $231 million.

For contrast, the operating deficit for the fourth quarter of 2021 was $7 million.

Additionally, Spotify publishes a Free Cash Flow statistic, which dropped from a loss of $73 million in the most recent quarter to a loss of $103 million in Q4 2021.

However, full-year net income remained positive, and we anticipate this trend to continue going forward on a full-year basis. “As expected, our net income was negative in the quarter,” as mentioned by Spotify.

Currency fluctuations and an “unfavourable geographic mix of staff costs relative to income” are two things that Spotify attributes some of the losses to. Although the resignation of its head of content, Dawn Ostroff, raises the possibility that it is abandoning podcasts, it also made investments in “new podcasting content and product investments.”

“Reflecting closely on 2022 as a whole, we are satisfied with our overall performance,” the statement read. Every year brings new chances and challenges. During the last year, we mostly met our internal goals, and we are enthusiastic about the dynamic we are creating as we look forward to 2023.

This momentum comes after 600 employees were let go. Daniel Ek, CEO of Spotify, stated in the blog post announcing the layoffs that “individually, these changes will allow me to come back to the portion where I do my best work.”