Spotify has achieved its first complete year of profitability since its inception in 2008. While the company has reported profitable quarters intermittently, it has typically incurred losses annually.
Apple may have influenced this turnaround with changes implemented last year …
For years, Spotify informed investors of its focus on expansion over profitability, but in 2023, it pivoted to pursue profit. The earnings report released today indicates that this goal has finally been met.
Today, we disclosed our fourth-quarter 2024 earnings, concluding Q4 stronger than ever by surpassing key metrics and commemorating our first complete year of profitability.
The company has reported substantial growth in both user engagement and premium subscriptions.
Monthly active users increased by 12% year-over-year, reaching 675 million […] with net additions of 35 million marking our highest Q4 ever. Premium subscribers rose by 11% to 263 million.
One contributing factor to profitability could be Apple’s recent decision to permit Spotify to display pricing in the iOS app in Europe and direct users to the Spotify website for sign-up, thereby circumventing Apple’s 30% fee.
In a significant policy reversal, Apple is now permitting Spotify to showcase pricing in the app – including special offers – and guide users to its website for sign-up.
This change occurred three months after Apple denied a Spotify app update that sought to implement these features and just four months post an EU ruling that fined Apple $2B for anticompetitive conduct affecting its music streaming competitor.
The reasons behind Apple’s previous blockage of this feature remain unclear, given that it seemed to comply with the company’s music-related guidelines.
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