Spotify Reports First Profitable Year & User Growth

Spotify Achieves Full-Year Profitability

Spotify unveiled its fourth-quarter financial results on Tuesday, signifying its first year of overall profitability in its 17-year history. A record operating income of €477 million ($509.48 million) was achieved during the quarter.

For the 2024 fiscal year, the total operating income amounted to €1.4 billion ($1.495 billion). This demonstrates a significant turnaround for the streaming giant.

User Growth Surpasses Expectations

A substantial increase in user engagement was also reported. Spotify added 35 million monthly active users (MAUs) in the fourth quarter.

This represents the largest net addition of users in a single Q4 in the company’s history, exceeding the initially forecasted 25 million. The total number of MAUs now stands at 675 million.

This figure indicates a 12% increase compared to the same period last year.

Subscriber Base Continues to Expand

Despite implementing two successive price increases for its Premium subscriptions, Spotify witnessed growth in its paid subscriber numbers.

The total number of subscribers reached 263 million, a rise from the 240 million reported in the prior quarter.

HiFi Subscription on the Horizon

Spotify previously indicated the impending launch of its HiFi, or “super premium,” subscription tier. This new offering is expected to facilitate further price adjustments.

CEO Daniel Ek has stated that the anticipated cost of this plan will be approximately $17 to $18 per month, representing a $5 premium over the existing Premium tier.

New Distribution Deal with Universal Music Group

The achievement of profitability coincides with Spotify finalizing a new, multi-year distribution agreement with Universal Music Group.

This agreement encompasses payments to artists and safeguards their streaming royalties. It may also pave the way for Spotify to introduce a new service for fans, featuring enhanced benefits.