In Q4 results reported today alongside the blockbuster news that it was acquiring Gimlet and Anchor to stride up its podcast push, the company said that monthly active users have knocked
207 million, up nearly 30 percent on a year ago, and that it is for the first moment reporting positive operating profit — of €94 million — and net income — of €442 million, making this Spotify’s first-ever quarter to post positive operating profit, net income and free money flow.
But those tough numbers were also dimmed by one of the large downsides of being a public company: failing to meet analyst expectations on its financials.
The company reported revenues of €1,495 million, up 30 percent on the same quarter a year ago. This works out to $1,702 million, falling short of the $1.71 billion analysts collectively were expecting.
On the earnings per share front, however, the company’s tough net income helped it well exceed estimates. Spotify noted diluted EPS of $0.36, while analysts had expected a loss per share of $0.22.
Spotify is still a relatively teenage company, and as it continues to face tournament from the likes of Apple, Amazon and Google, it’s still showing very tough growth despite not meeting some targets.
With a push into more countries in the Middle Eastern region, Spotify is now active in 78 countries, and said it has plans to add more this year. Across that footprint, listening moment is growing, both in its free (ad-supported) and paid tiers, with 15 billion hours of content consumed in the quarter.
While the company continues to build out its free tier with more adtech both across its song and now podcast offerings, its Premium tier is also continuing to grow and still represents the bulk of the company’s revenues.
Subscribers now stand at 96 million for its paid services, up 36 percent, with Spotify attributing some of the tough performance to promotions with Google Home — its first-ever hardware bundle — and the vacation season rush. The company has been increasingly diversifying its paid tiers, now benefaction student and family plans alongside its single subscriptions.
Revenues from paid subs account for nearly all of Spotify’s turnover. In Q4 it was €1,320 million, or 88 percent of the total, and in line with revenue growth overall, also up 30 percent over last year. Average revenue per user was €4.89, Spotify said.
Ad-supported revenue, meanwhile, accounted for just €175 million of its total turnover.
The company’s B2B sales are similarly being developed in earnest. Spotify for Artists — which helps to measure how tracks are played and other business aspects of an artists’ profile on Spotify — is now used by 300,000 creators, the company said.
Now that there is also a supplementary Spotify for Podcasters service, given that Spotify is now amping up its spoken content with the Gimlet and Anchor acquisitions, that may also commence to see a jolt in usage. Currently Spotify says that 10,000 podcasters are using its analytics equipment for audience and other insights, which is a relatively tiny number. The judge is still out on this and Spotify’s other pushing analytics efforts.