How does the Spotify result work

Spotify increases user numbers - and makes high losses

Spotify presents numbers
Image: Spotify, screenshot: The music streaming market leader Spotify won even more users than planned in 2019 despite competition from Apple and Amazon.

The number of paid premium subscriptions continued to grow, as the company announced in Stockholm today. Despite increasing sales, Spotify is still deep in the red. At 186 million euros, the net loss was even more than twice as high as in the previous year.

Targeted for 2020: 153 million paying subscribers

Spotify presents numbers
Image: Spotify, Screenshot: In the fourth quarter, Spotify had 271 million active listeners a month, slightly exceeding its target of up to 270 million, which was raised in the fall. Compared to the same period of the previous year, this corresponds to an increase of 31 percent. Most Spotify users still access the free version of the service with advertising and a limited range of functions. The number of paying premium users did not grow quite as strongly by 29 percent to 124 million, but was in the upper range of the target range. Compared to the third quarter, the increase was ten percent. Apple Music currently has around 60 million paying subscribers, and Amazon Music Unlimited recently grew to 55 million customers.

In the year as a whole, Spotify increased its sales by almost 29 percent to 6.76 billion euros. However, increased costs, especially for marketing and development, caused the operating loss to rise from 43 to 73 million euros. In the previous year, the company had also benefited from a tax credit, while this time it had to pay taxes. For example, Spotify had to pay additional taxes for issuing shares to the workforce, especially in Sweden, because the share price had developed positively in 2019.

In the current year, Spotify plans to increase the number of monthly active listeners to 328 to 348 million, including up to 153 million paying subscribers. Despite the planned growth in sales, the company expects an even higher loss of up to 250 million euros in 2020. "2020 will be an investment year," says Spotify's letter to shareholders.

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