Spotify reported its Q4 2024 results, marking its first full year of operating income profitability. The company exceeded most key performance indicators and saw notable growth in regions such as India.
Spotify Q4 2024 – User Growth and Engagement
Monthly Active Users (MAUs): Spotify’s total MAUs reached 675 million, a 12% year-over-year increase, with a net addition of 35 million in Q4. Growth was observed across all regions, particularly in the Rest of World and Latin America. The company’s annual Wrapped campaign contributed to this increase, along with shifts in competition in some developing markets, including India.
Premium Subscribers: Premium subscribers increased by 11% year-over-year, reaching 263 million. Net additions of 11 million matched the Q4 2019 high, with growth seen in all regions, particularly the Rest of World. India was a key contributor to premium subscriber growth.
Ad-Supported MAUs: Ad-supported MAUs also increased by 12% year-over-year, reaching 425 million.
Spotify Q4 2024 – Financial Performance
Total Revenue: Spotify’s total revenue for Q4 2024 was €4.242 billion, a 16% year-over-year increase (17% on a constant currency basis). Premium revenue grew by 17% to €3.705 billion, driven by increases in subscribers and average revenue per user (ARPU). Ad-supported revenue grew by 7% to €537 million.
Gross Profit and Margin: Gross profit reached €1.368 billion, a 40% year-over-year increase, with a gross margin of 32.2%. Both premium and ad-supported segments contributed to this improvement, along with favorable costs.
Operating Income: Operating income was €477 million in Q4, reflecting an 11.2% operating margin. Lower personnel and marketing costs contributed to this result, though it was partially offset by €96 million in social charges.
Free Cash Flow: Free cash flow was €877 million in Q4, bringing the full-year total to €2.3 billion. This strengthened the company’s balance sheet, which had €7.5 billion in cash and equivalents at year-end.
Full-Year Profitability: Spotify’s full-year operating income reached €1.4 billion, making it the first full year of operating income profitability in the company’s history.
Spotify Q4 2024 – India: Growth and Adoption
Strategic Importance: India remains an important market for Spotify, contributing to overall user and subscriber growth. The country is included in the “Rest of World” category, which showed significant expansion.
User and Subscriber Growth: The increase in MAUs and premium subscribers in India was influenced by changes in competitor positioning and broader adoption of the platform’s paid services.
Market Dynamics: Spotify’s performance in India reflects trends in developing markets, where competition and adoption patterns shifted in Q4.
Spotify Q4 2024 – Key Factors and Initiatives
Wrapped Campaign: The 10th annual Wrapped campaign saw record user engagement, increasing by 10% year-over-year across 184 markets and 53 languages.
Video Podcasts: Spotify introduced uninterrupted video podcasts for premium subscribers in select markets, expanding content options.
Creator Monetization: Spotify for Podcasters was rebranded as Spotify for Creators, with the introduction of the Spotify Partner Program to provide new monetization opportunities.
Music Industry Payouts: Spotify paid out $10 billion in royalties to the music industry in 2024.
Spotify Q4 2024 – Outlook for Q1 2025
Spotify expects continued growth in Q1 2025, with projections including:
- Total MAUs: 678 million
- Premium subscribers: 265 million
- Total revenue: €4.2 billion
- Gross margin: 31.5%
- Operating income: €548 million
The company anticipates further growth and improving margins while reinvesting in long-term initiatives.
Social Charges
Social charges, which are payroll taxes related to employee salaries and benefits, fluctuated with share price changes. In Q4, these charges were €80 million above forecast due to share price increases. A 10% share price change can impact social charges by approximately +/- €33 million.
Additional Information
- Spotify had 7,261 full-time employees at the end of Q4.
- Constant currency measures are non-IFRS.
- The company shares material updates via its investor website and social media channels.
Spotify’s Q4 results reflect steady growth and profitability, with India playing a role in overall user expansion. The company is positioning itself for continued development in 2025.
Source:https://www.musicplus.in/spotify-achieves-first-full-year-of-profitability-with-record-growth-in-india/