Despite the fourth-quarter operating loss, streaming company Spotify saw its user base increased to 124 million paid subscribers, with 271 total monthly active users (MAUs) at the close of 2019.
The figures suggest a significant growth based on the 113 million premium and 248 million MAUs recorded at the end of September. The achievement reveals a 29% year-over-year growth for Spotify’s premium tier. It can be recalled that Spotify had 96 million paid subscribers at the end of 2018.
Spotify celebrates a total of 153 million ad-supported monthly active users, an increase of 9% on the quarter and 32% year over year. This accomplishment reflects the changes for MAUs, which rose to 9% for the quarter and 31% y/y.
However, Spotify's average revenue per user (ARPU) decreased by 5% y/y to $5.12, a subtle decline from the €4.67 per premium user the company averaged at the end of September. Spotify explains this was a result of “the extension of the free trial period across our entire product suite in the quarter."
For the last quarter of 2019, the total revenue recorded by Spotify was $2.04 billion (€1.855 billion), an increase of 24% y/y and 7% compared to the previous quarter. Most of these earnings came from premium subscribers, noting a 24% increase y/y and 5% increase quarterly. Meanwhile, ad-supported revenue reached $239 million, a 23% y/y and 27% increase since the third quarter.
The streaming service provider’s operating expenses reached $606 million in the fourth quarter, an increase of 80% y/y. The company attributes this to " higher than expected social charges resulting from an increase in our share price."
Operating losses ended at $84.8 million for the quarter, a decrease from a profit of $59 million for Q3 and 94 million a year ago. Spotify garnered $223 million in net cash flows from operating activities, a 35% increase y/y, and $186 million in free cash flow.
The company has also announced that it entered a into a definitive agreement to acquire The Ringer, a leading creator of sports, entertainment and pop culture content, founded by Bill Simmons in 2016.
"We look forward to putting the full power of Spotify behind The Ringer as they drive our global sports strategy,” the company states.
