Facts: Price down 74 percent from historic peak
Spotify shares have so far this year risen by almost 30 percent on the New York Stock Exchange, to the highest price in four months. But it is a battered stock that is recovering.
Last year alone, two-thirds of the market value was erased after the share lost 29 percent of its value in 2021. And if you measure from the price peak in February 2021, the Spotify share has fallen by 74 percent, even if you factor in this year’s price rise.
The Spotify share was introduced on the New York Stock Exchange for 166 dollars each in the spring of 2018. Almost five years later, it costs a little over 100 dollars.
Facts: Bloomberg
On the stock exchange, it’s the thumbs up. The stock rises 5 percent in futures trading ahead of Tuesday’s stock market opening on Wall Street.
“We ended 2022 with a strong development in the fourth quarter,” states the company in its report.
More paying subscribers than expected
The number of total users rose to 489 million per month, up from 406 million a year ago and from 456 million in the third quarter. The increase of 33 million new users per month is the largest growth Spotify has ever reported for a fourth quarter, states the company in the financial statements.
The number of paying subscribers rose to 205 million, up from 180 million a year ago and 195 million in the third quarter. Analysts had on average expected an increase to 202 million paying subscribers.
As for revenues, they rose to 3,166 million euros, an increase of 18 percent year-on-year. The operating result was an increased loss, 231 million, compared to a loss of 7 million a year ago.
Spotify states that the free cash flow was negative during the quarter, but that for the whole of 2022 it still ended up in the positive.
“We expect this annual trend to continue as we move forward,” writes Spotify about the outlook for cash flow going forward.
Speculation about price increases
The closing comes after last week’s announcement that Spotify is getting rid of 6 percent of its nearly 10,000 employees around the world. There are around a hundred employees in Sweden and around 500 more employees in other countries.
There has also been some rearranging in the management team during the quarter. Dawn Ostroff, who built Spotify’s podcast business, has left the company. At the same time, Alex Norström and Gustav Söderström have been given more prominent roles with the titles “co-presidents”.
Prior to the report, there has also been speculation as to whether Spotify is about to turn its back on competitors such as Apple Music and Amazon Music in terms of price increases.