Spotify crosses 400-million monthly users as revenue grows

While the Joe Rogan controversy appeared to push SPOT stock sharply downward this week, the company’s reported Q4 2021 financials (released earlier this week) draw a less troubled picture with lots of green ink.

Spotify crossed the 400-million mark of monthly active users (MAUs) in Q4, reaching 406-million. That’s a 7% increase from the previous quarter, and 18% growth year-over-year. The platform now serves 180-million Premium subscribers and 236-million ad-supported users who don’t pay monthly.

Most of Spotify’s margin sits with the subscribers; Premium revenue totaled $2.7-billion for the quarter. Advertising revenue (which includes podcasting and music streaming) was $394-million, while subscription revenue was $2.3-billion. So, although Spotify serves 24% more Free users than Premium users, the Premium tier earns more money by a multiple of 5.8x.

Spotify’s cost of revenue continues to rise. In Q4 2021 that number was $2.7-billion, up from $2.2-billion in the year-ago period. Taking the annual view, Spotify’s cost of revenue for 2021 was $7B, up from $5.9B in 2020 — nearly a 21% increase.


Brad Hill