The world's most popular streaming service Spotify on Wednesday recorded wider losses on rising costs even though subscriber numbers beat expectations in the second quarter.
The world's most popular streaming service Spotify on Wednesday recorded wider losses on rising costs even though subscriber numbers beat expectations in the second quarter.
Between April and June, the Swedish giant suffered a net loss of 125 million euros ($126 million), compared to 20 million euros in the second quarter of 2021.
In the same period, the number of paying subscribers rose by 14 percent to 188 million out of a total of 433 million including non-paying users.
The 19 percent increase in overall users is the largest ever in the second quarter, the company said.
Analysts had expected a loss of 127 million euros ($128 million) and a rise in paying subscribers to 187 million, Bloomberg reported.
The rise in paying subscribers confounded concerns that the rising cost of living would push consumers to cut back on non-essential spending such as entertainment.
Spotify's operating losses hit 194 million in the second quarter, compared with operating profits of 12 million euros a year earlier.
Spotify blamed the losses on higher staff costs after expanding its team and new acquisitions as it widens its reach into the world of podcasts.
Spotify raised hackles earlier this year with a $100 million multi-year deal with controversial star podcaster Joe Rogan.
At the end of the second quarter, Spotify listed 4.4 million podcasts on its platform, a rise of 400,000 from the end of March.
The number of users that engaged with podcasts grew in the "substantial double-digits" year-on-year and "per user podcast consumption rates continued to rise", it said.
Spotify expects operating losses of 218 million euros in the third quarter due to unfavourable exchange rates.
The euro has slumped against the dollar in recent months, triggered by the war in Ukraine and the mounting risks to the European Union's economy, as well as a relatively slow increase of interest rates by the ECB.
Slammed by a weakening economy, increased competition from TikTok and recent privacy changes on iPhones, the Snapchat owner missed second-quarter revenue targets and warned that "forward-looking visibility remains incredibly challenging."
Unilever said it sees net material inflation at about 4.6 billion euros this year, including a 2.6 billion euro hit in the second half. Unilever's first-half operating profit margin fell to 17% from 18.8% a year earlier, even as Unilever raised prices by 9.8%.
In 2023, Spotify suffered a net loss of 532 million euros. Whilst the company has been operating at a loss since its inception, the 2023 figure is an increase in net loss from those reported between 2020 and 2022.
Why does Spotify still lose a lot of money despite having millions of subscribers? The short answer is Spotify is spending more than it is making. Here's a few reasons: Spotify pays about 70% of its revenue to labels.
The company has recently expanded beyond music to stay ahead, but has struggled to make money. WSJ music industry reporter, Anne Steele, tells us about Spotify's plans for profitability and how they could impact the streaming business.
Spotify on Tuesday said it lost less money than it was anticipating in the final quarter of 2023, in its latest sunny earnings report. Why it matters: For years, investors punished the audio giant for expensive investments in podcasting and a bloated staff that ate into its margins.
Spotify faces particular scrutiny due to its free service tier, which allows users to listen free with advertisem*nts between tracks. The tier has led to a variety of major album releases being delayed or withdrawn from the service.
Spotify increased premium subscriber numbers by 4% quarter on quarter to 236 million in the final three months of the year, an increase of 10 million, making for a record year of 31 million new subscribers.
Just days after people gleefully posted their Spotify Wrapped, bad news came for the music streaming giant. Spotify announced today that it would cut 17 percent of its workforce, a chunk that equates to an estimated 1,500 people. It's the third time the world's largest music streamer has cut jobs this year.
Although most music stocks gained value this week, Spotify dropped 4.6% to $302.27 despite the U.S. markets surging to record heights and two new analyst reports that indicated the company's share price has much room for improvement.
Spotify is unprofitable. Specifically, in Q4 2023, the company reported a net loss of 36 cents per share. Granted, this result beat Wall Street's prediction that Spotify would lose 40 cents per share.
Spotify has seen consistent quarter-on-quarter growth of its active user base since 2015. In fact, Spotify has added 193 million monthly active users over the last two years (Q1 2022 – Q1 2024).
Spotify's emergence in 2006 demonstrated that it was possible to monetise streaming in a way that was both legal and attractive to music lovers. Eighteen years on and Spotify has just turned its largest quarterly gross profit – more than a billion euros (£859 million) in the three months to the end of March.
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