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.