Spotify Tech's Q4 Performance: MAU Growth, Ad-supported Tier Growth and More

Spotify Technology SA SPOT stock climbed after it reported fourth-quarter FY23 revenue growth of 16% year-on-year to €3.67 billion ($3.95 billion), missing the consensus of $4.06 billion. 

EPS loss of €(0.36) or $(0.39) missed the consensus loss of $(0.14).

Premium Revenue grew 17% Y/Y to €3.17 billion, helped by subscriber additions. 

Total MAUs (Monthly Active Users) rose 23% Y/Y to 602 million. Ad-supported MAUs grew a whopping 28% y/y to 379 million. Premium Subscribers grew 15% Y/Y to 236 million. 

Within Premium, the average revenue per user (ARPU) rose by 1% Y/Y at €4.60. Ad-Supported revenue rose 12% to €501 million.

Margins: The gross margin improved by 140 bps to 26.7%, reflecting improved podcast and music profitability. The Premium gross margin was 29.1%, up 45 bps Y/Y, reflecting Marketplace growth. 

Ad-supported gross margin was 11.6%, up 645 bps Y/Y, reflecting improving podcast profitability. Operating loss was €(75) million. 

The adjusted operating income was €68 million with a margin of 2.1 %.

Spotify held €4.3 billion in cash and equivalents and generated €396 million in free cash flow, and €397 million in operating cash flow.

Outlook: Spotify sees first-quarter revenue of €3.6 billion (consensus $3.93 billion). It expects total MAUs of 618 million. 

Price action: SPOT shares traded higher by 5.44% at $235.40 premarket on the last check Tuesday.

Spotify Photo by esthermm on Shutterstock