Spotify Technology continued to add users in the fourth quarter as it expanded access to audiobooks globally and added features such as one allowing listeners to follow music venues for coming shows.
Spotify introduces a new in-app option that lets users transfer playlists easily from other music services. (Spotify)
The results
For the fourth quarter, Spotify’s monthly active users grew to 751 million, up 11% from the same quarter a year ago and topping the company’s prior guidance of 745 million. The Swedish audiostreaming giant’s premium subscribers increased by 10% to 290 million, also beating the company’s prior guidance by about one million.
The company posted net income of €1.17 billion—equivalent to about $1.4 billion—or €4.43 a share, up from €367 million, or €1.76 a share, a year earlier. Analysts on average were expecting a profit of roughly €2.71 a share for the fourth quarter this year, according to FactSet.
For the full year, Spotify’s net income was €2.2 billion, up about 86% from the previous year. Revenue grew 10% to €17.19 billion for the year.
The context
Spotify’s quarter included the latest edition of the company’s popular “Spotify Wrapped” feature, which gives users an analysis of their listening history for the year, including most-listened songs and an estimated “listening age.” It has become a popular campaign for sharing on social media. The company said more than 300 million users engaged with the feature in 630 million social-media shares.
In January, Spotify said it was raising the cost of a U.S. premium subscription to $12.99 a month, up from $11.99.
The outlook
Spotify’s share price was down about 35% over the past 12 months as of Monday’s close. For the current quarter, the company forecast that monthly active users would grow to 759 million, adding about eight million, while premium subscribers would increase to 293 million, adding roughly three million.
It forecast revenue of €4.5 billion for the current quarter, and a gross margin of 32.8%.
Dow Jones, publisher of The Wall Street Journal, has a content partnership with Spotify.
