(Stockholm) The world’s number one audio platform Spotify announced on Tuesday that it had reached a new peak of 205 million paying subscribers at the end of 2022, beyond expectations, while widening its losses, its chronic problem.
The Swedish technology flagship, which has just announced a plan to cut nearly 6% of its workforce to adapt its costs to its growth, suffered a net loss of 430 million euros last year, much more higher than in 2021 (34 million).
Analysts on average had expected a loss of 441 million in 2022, according to Factset.
Around 7:30 a.m. (Eastern time), Spotify’s stock took 5% in electronic trading before the opening of Wall Street, at 105 dollars.
The annual turnover – which comes mainly from subscribers – also slightly exceeds expectations, with an increase of 21% over one year, to 11.7 billion euros.
The number of paying subscribers of the world leader in audio streaming increased by 14% year on year, to 205 million, against 202 million expected by analysts, driven according to the group by good growth in all regions and in particular in Latin America .
Recent publicity campaigns have resulted in success, the group claims.
The total number of users, including those of the free version, has reached 489 million and is expected to cross the half-billion mark by the end of the first quarter of 2023, according to Spotify.
This increase, recorded despite the loss of 2 million users in Russia, was notably driven by a growing number of users from generation Z, born in the late 1990s, according to Spotify.
“We ended 2022 well despite a difficult year,” said Swedish boss and co-founder of the group, Daniel Ek, welcoming “excellent growth” of the platform and promising “better efficiency” in 2023.
Spotify expects to reach 207 million paid subscribers by the end of March.
The Stockholm-based but New York-listed platform has been punctually profitable in some quarters.
But it has been steadily posting losses for several years, despite a meteoric growth in the number of its subscribers and a lead over its competitors such as Apple Music or Amazon Music.
“Too ambitious”
Daniel Ek, 39, announced last week the cut of around 600 jobs, out of a total of just under 10,000, in the wake of other big names in global technology.
He admitted having been “too ambitious by investing faster than our turnover growth”.
The social plan is the biggest in the young history of the Scandinavian flagship, a start-up founded in 2006 in Stockholm and which has become one of the few big European names in technology.
Historical leader in legal music streaming, Spotify has also invested more than a billion euros in podcasting in recent years, becoming there too number one worldwide.
But the profitability has yet to be demonstrated, according to analysts, who are increasingly skeptical.
The development of the podcast has also been a source of controversy, notably with American star Joe Rogan being accused of spreading misinformation on his shows.
The group, already regularly criticized by famous artists or not for the payment deemed insufficient for each “stream”, had been forced to take measures to calm the controversy.
Doubts materialized on the stock market: the Spotify action has been struggling for two years and has lost nearly two-thirds of its value. Market capitalization fell below $20 billion.
