While it certainly has to contend with the likes of Apple Music and YouTube Music, Spotify still commands the largest userbase in all of music streaming — and the company seems to be continuing to gain on that lead with its latest earnings report.
Today, the company released its fourth-quarter earnings for 2023 and revealed that Spotify now commands a user base of over half a billion. Last year in Q4 2022, the app had 389 million monthly active users. In Q4 2023, that number has now grown 23% year over year to over 602 million.
The company has seen its paid subscriptions grow as well. In Q4 2022, paid subscribers sat at around 205 million people. By Q4 2023, that number has grown 15% year over year to over 236 million. In comparison, the latest projections put Apple Music at just over 101 million, but it’s tough to know for sure since Apple doesn’t break out any of its services into its own metrics publicly.
In addition to the user and subscriber growth, the company also grew revenue and improved its operating losses. Here’s a breakdown of the highlights from the company’s Q4 2023 earnings:
- Monthly Active Users grew 23% Y/Y to 602 million and 1 million ahead of guidance. Net additions of 28 million represented the second-largest Q4 net addition performance in our history.
- Subscribers grew 15% Y/Y to 236 million. Net additions were 1 million ahead of guidance. Q4 net additions of 10 million contributed to a record full year of net additions of 31 million.
- Total Revenue grew 16% Y/Y to €3.7 billion.
- Gross Margin finished at 26.7%.
- Operating Loss was (€75) million for the quarter, which was better than our updated guidance. Excluding one-time charges, we generated €68 million in adjusted Operating Profit, which is more than double the third quarter as the business continues momentum towards sustainable growth and profitability.
2023 was a pretty big year for Spotify. The company launched a number of redesigns to its app including a new experience on mobile, desktop, and smart TVs. The TV app overhaul is so nice that it honestly has me considering a switch from Apple Music. The company also launched over 200,000 audiobooks for its Premium subscribers to listen to — even though you’re limited to 15 hours per month, that’s still a great deal considering most books are less than that and one audiobook alone can cost $19.99.
The company also improved its integration with TikTok. Users can now add a song to their Spotify library right from the TikTok app. The feature is currently available for both Spotify Free and Premium users in the U.S. and U.K. I really wish Apple Music did something like this. We’re all starting to find new music through apps like TikTok and I just want to tap a button to save it to my library.
Of course, it isn’t all sunshine and rainbows for Spotify. The company went through layoffs last year that impacted 17% of its workforce — or over 1,500 people. It also raised the price of Spotify Premium for the first time in over a decade to $10.99 per month in the United States — up from its longstanding price of $9.99 per month.
We’ll see what Spotify has in store for 2024. Give us unlimited audiobook listening with Spotify Premium and I’ll switch from Apple Music, I swear!