The Spotify stock, which has already risen 23 percent since the turn of the year, increases by nearly 10 percent on the New York stock exchange after the 2024 annual report was presented.
It's incredibly wonderful to end the year so strongly. It's a record in the number of new users. It's primarily driven by growth countries. But also an incredibly strong "Wrapped", says Spotify's co-founder and CEO Daniel Ek to TT.
Ten million more than expected
The number of users increased by 12 percent to 675 million in the fourth quarter. It was ten million more than Spotify saw ahead in November. The operating result of 477 million euros was a new record, as was the gross margin of 32.2 percent.
The "Wrapped" campaign – that is, the annual summary of each individual user's most played artists and songs – is something Spotify has presented for ten years in a row.
It gets bigger and bigger every year. We had two-digit growth rates in how many engaged in "Wrapped" the first week compared to previous years. Every year I think that now we must have reached the top, but every year it continues to increase, says Ek.
It has become a global phenomenon, which other brands around the world are now copying and taking after. It's incredibly fun, he adds.
Seasonal headwind expected
When it comes to the forecast ahead, Spotify expects a slightly slower growth rate in the first quarter, but even there, they are above market expectations.
We always have a seasonally weaker quarter in the first quarter. Then we had a very big upswing in the fourth quarter, says Christian Luiga, Spotify's CFO.
We expect a slightly lower intake of users in the first quarter due to that. But it's just a seasonal variation, he adds.
Spotify expects the number of monthly users to increase to 678 million in the first quarter, up by three million from the turn of the year. The number of premium users is expected to continue upwards to 265 million, an increase of two million.
Revenue is expected to remain around 4.2 billion euros in the first quarter. The operating result is expected to increase to 548 million euros, while the gross margin is expected to decrease slightly to 31.5 percent.
Streaming service Spotify reports an increase in the number of monthly users by 12 percent to 675 million for the fourth quarter of 2024. The number of paying subscribers, so-called premium users, increased by 11 percent to 263 million.
The user growth was larger than expected. Spotify had, according to its forecast from November last year, expected the number of users to increase to 665 million, of which 260 million paying subscribers.
The operating result rises to 477 million euros. It's a new record and higher than the average forecast among analysts of 468 million, according to the news agency Bloomberg. However, it's slightly lower than what Spotify itself had expected.
Total revenue increased by 16 percent compared to the fourth quarter a year earlier, to 4.2 billion euros. It was in line with the average forecast among analysts and slightly higher than Spotify's forecast.
The gross margin – a profitability measure – increased by 5.55 percentage points to a record high of 32.2 percent. It was more than what Spotify had expected and higher than the average forecast among analysts, which was 31.8 percent.
Streaming service Spotify – whose value has risen to over 1,200 billion kronor in trading on the New York stock exchange – presents its annual report for 2024, after the company last week summarized last year's payments to the music industry to a record high of 10 billion dollars.
Spotify – which, in addition to music, has 6.5 million podcast titles and 330,000 video podcasts on its platform – recently got a new agreement in place on terms and compensation with music giant Universal Music Group, featuring world stars like Taylor Swift and U2.
Spotify was launched by innovators and entrepreneurs Daniel Ek and Martin Lorentzon in 2008. The company competes, among others, with Apple, Youtube, Amazon, and French Deezer when it comes to music streaming.
