Spotify achieves record growth in 2023 with strong user surge and revenue increase
Spotify's revenues went up 16% while seeing its monthly users reach over 600 million.
Spotify has reported an impressive 16% year-over-year increase in revenues for the fiscal year 2023, reaching $4.05 billion. This growth surpassed expectations, driven by a substantial surge in both monthly active users, up by 23% to 602 million, and premium subscribers, up by 15% to 236 million.
Despite turning a profit in the third quarter of the year, Spotify faced an operating loss of $82.7 million. However, the company stated that excluding one-time charges, its operating profit would have been $75 million, more than double the previous quarter's profit of $34 million.
In the fourth quarter, Spotify exceeded expectations by adding 10 million subscribers, bringing the total for the year to 31 million. Monthly active users reached 602 million, surpassing projections by 1 million and marking the second-largest quarterly increase in the company's history. At the end of 2022, Spotify boasted 205 million subscribers and 489 million monthly average users.
In the past year, Spotify implemented cost-cutting measures, including a 17% reduction in staff in December. This move, coupled with the company's first price hike on standard premium plans in over a decade, contributed to profitability in the third quarter. Despite one-time charges, which included $153 million in net severance-related and real estate optimization charges, Spotify remains optimistic about its future prospects.
The company also shared insights from its popular year-end Wrapped campaign, revealing engagement growth of 40% year over year in 170 markets, attracting more than 225 million monthly average users. Additionally, Spotify emphasized its commitment to audiobooks by adding 200,000 titles to the platform in the past year.