Spotify Music Posts First Annual Profit, Stocks Rally
Spotify announced its first full year of profitability on Tuesday, with a net income of 1.14 billion euros after the fiscal year
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Spotify announced its first full year of profitability on Tuesday, with a net income of 1.14 billion euros after the fiscal year.
This resulted in a double-digit gain in the stock price on Tuesday. The gross profit of the Luxembourg-based company rose 40% year over year and 10% over the prior quarter. Operating income was somewhat below expectations at 477 million euros.
The music streaming service stated it paid a record $10 billion in royalties to the music industry in 2024, after the announcement in January of the streamer’s new multi-year publishing agreement with Universal Music Group.
The deal will involve additional paid subscription tiers, music bundles and non-music content, and direct licensing between the two companies for Spotify in the US and several other countries.
Year-over-year growth was facilitated by the annual December listening analysis, which made Spotify Wrapped one of the year’s biggest drivers of user engagement.
The net growth of MAUs of 35 million was a fourth-quarter record.
MAUs were up 12% for the year and 5% from the previous quarter. Spotify’s fourth-quarter net income of 367 million euros an improvement over the past quarter, was significantly higher than the company’s net loss of 70 million euros, or 36 cents per share, from the same quarter last year. Revenue for the fourth quarter was 4.24 billion euros, significantly more than the 3.67 billion euros earned in the same quarter in 2023.
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