Spotify noticed its world Premium Subscriber base develop to 239 million paying customers in Q1 – and achieved its biggest-ever quarterly revenue within the three months to finish of March.
That’s in response to the corporate’s newest monetary outcomes (for Q1 2024), filed at the moment (April 23), through which SPOT reported that its Premium Subscriber base was up 14% YoY, and up by 3 million internet subscribers on the 236 million that SPOT counted on the finish of the prior quarter (This fall 2023).
Spotify reported that its Premium Subscriber development was led by “continued double-digit YoY development throughout all areas” in addition to development in its Household and Duo plans.
Spotify breaks down its Premium Subscriber base by area inside its investor presentation, reporting that Europe accounted for 38% of its complete premium subscriber base in Q1 (see beneath).
North America accounted for 27% of SPOT’s complete subscriber base in Q1, whereas Latin America accounted for 22%.
Spotify famous in its investor presentation that its “enterprise carried out effectively in Q1, led by wholesome subscriber beneficial properties, improved monetization and file power in profitability”.
“We’ve talked about 2024 because the yr of monetization and we’re delivering on that ambition.”
Daniel Ek, Spotify
The corporate added: “Though we noticed larger MAU variability throughout the quarter amidst moderated advertising and marketing exercise and organizational change, Subscriber internet additions of three million had been in-line with steerage whereas YoY development in Premium ARPU and promoting income each improved.”
Month-to-month Energetic Customers:
Spotify’s complete variety of Month-to-month Energetic Customers, which mix paying customers and ad-supported customers, grew 19% YoY to 615 million.
That was up 13 million MAUs from the 602 million reported for the prior quarter (This fall 2023), however beneath steerage by 3 million (Spotify forecast that it could attain 618 million MAUs in Q1).
The corporate reported that its MAU efficiency in Q1 mirrored “wholesome development throughout all areas”, led by Latin America and Remainder of World, in addition to “Moderated advertising and marketing exercise, which led to extra normalized development following 2023’s file efficiency”.
PREMIUM REVENUE
When it comes to funds, in Q1, Spotify’s Premium / subscriber revenues grew 21% YoY at fixed forex to €3.247 billion ($3.525bn) and was pushed, in response to SPOT, by its subscriber development and a Premium ARPU enhance to €4.55 ($4.94) – up 7% YoY fixed forex.
Spotify famous in its investor presentation that “excluding the impression of FX, ARPU efficiency was pushed by worth enhance advantages, partially offset by product and market combine”.
July 2023 marked the first time in its 15-year historical past that Spotify elevated its flagship subscription worth level in a number of territories together with the US and UK. Spotify additionally plans to lift its subscription costs once more this yr in a number of markets, together with the US.
AD-SUPPORTED REVENUE
Spotify’s Advert-Supported Income in Q1 2024 was €389 million ($422.37), up 19% YoY fixed forex, reflecting double-digit Y/Y development throughout all areas.
SPOT reported that its “music promoting income grew wholesome double-digits YoY pushed by development in impressions bought and elevated pricing”.
The corporate’s podcast promoting income grew quicker than music, nonetheless, pushed by what SPOT stated was “vital development in impressions bought throughout Unique and Licensed podcasts and the Spotify Viewers Community, partially offset by softer pricing”.
Spotify generated €3.636 billion ($3.947bn) in complete quarterly income (together with Premium and ad-supported), which was up 21% YoY at fixed forex.
PROFITABILITY
The corporate’s Gross Margin completed at 27.6% in Q1 2024, up from 25.2% in Q1 2023.
When it comes to profitability, Spotify posted an working revenue of €168 million ($182.41m), which it famous in its investor presentation was “a brand new quarterly excessive” and mirrored “decrease personnel and associated prices and advertising and marketing spend”.
Spotify slashed round 17% of its world workforce in December, the streaming firm’s third spherical of job cuts final yr.
In response to its newest investor submitting, on the finish of Q1, Spotify’s workforce consisted of 7,721 full-time staff globally, which it famous on Tuesday (April 23), “consists of staff impacted by December 2023 workforce discount that remained on backyard go away”.
SPOT additionally reported that its working Earnings was impacted by €82 million ($89.03m) in Social Prices, that are payroll taxes related to worker salaries and advantages in among the international locations through which the corporate operates.
Spotify’s working bills noticed a decline of 9% YoY at fixed forex, from €922 million in Q1 2023 to €836 million ($907.72m) in Q1 2024 (see beneath).
Spotify additionally reported that its Gross Revenue, which stood at €1.004 billion ($1.090bn) in Q1, surpassed €1 billion for the primary time in its historical past.
When it comes to steerage for Q2, Spotify forecasts reaching 631 million MAUs, an addition of round 16 million internet new MAUs within the quarter.
The corporate initiatives its complete Premium Subscriber base to hit 245 million in Q2, an addition of roughly 6 million internet new subscribers within the quarter.
Spotify forecasts an working revenue of €250 million for Q2, and complete income of €3.8 billion.
“We’ve talked about 2024 because the yr of monetization and we’re delivering on that ambition,” stated Spotify co-founder and CEO Daniel Ek.
“Now as we’ve shifted to give attention to robust income development and margin growth, we see a transparent alternative to make sure we’re additionally persevering with to develop the highest of our funnel.
“I be ok with the modifications we’re implementing and stay very assured in our capacity to achieve the formidable plans we’ve outlined.”
All EUR-USD conversions made on the common price of the related interval in response to the European Central Financial institutionMusic Enterprise Worldwide
