People are flocking to Spotify, as evidenced by the company's recent financial results - yet it continues to lose over a quarter of a billion dollars per quarter, even after the January layoffs.
Spotify has been working to add more content to its service in the form of podcasts and audiobooks and has redesigned its app in an effort to keep users engaged with the platform. The first quarter of 2023 saw strong user growth but another financial loss.
The music streaming company recorded 515 million monthly active users, a 22% increase from the previous year – representing Spotify’s biggest increase in the first quarter and beating forecasts by 15 million.
According to the company, growth was observed across almost all age groups and in both developed and emerging economies.
The number of people paying to subscribe to Spotify rose 15% to 210 million, beating Spotify's expectations, according to the Wall Street Journal. However, it posted losses of about $248 million in the first quarter of 2023, which were more significant than its $231 million revenue drop in the fourth quarter of 2022 .
Executives have said that as the company tries to expand into new types of audio and attract customers from around the world, investments will take priority over profit. However, they expect Spotify's profits to improve in 2023.
About 600 people, or about 6% of Spotify's staff, were laid off in January as part of a broader cost-cutting after a spending spree during the pandemic. The company said on Tuesday that the cost of the layoffs and severance payments had increased operating expenses for the quarter.
For the current quarter, Spotify predicts that monthly active users will grow to 530 million and premium subscribers to 217 million. It also expects its revenue to reach $3.5 billion.
Information source: appleinsider.com
