Spotify today reported a sharp growth in subscriber numbers as the music streaming giant cashed in on its recent investment in podcasts.
The Swedish firm boosted its monthly active users to 271m in the four quarter, up 31 per cent year on year, with paid subscribers up 29 per cent to 124m.
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Total revenue for the period jumped 24 per cent to €1.9bn (£1.6bn). However, operating expenses surged 80 per cent in the period due to social charges — payroll taxes linked to stock based compensation — and the firm posted a loss of €77m.
Spotfiy said the quarterly growth in paid subscribers was the company’s highest yet, boosted by the expansion of its three-month free trial. However, revenue growth from the platform’s ad-supported users fell slightly short of expectations.
Shares in Spotify rose more than five per cent in pre-market trading as investors welcomed the figures.
Spotify said it had experienced “exponential growth” in its podcast offering, with consumption hours rising nearly 200 per cent in the fourth quarter. More than 16 per cent of the firm’s total users now listen to podcasts.
Last year the company splashed out at least €300m to buy three podcast startups in a bid to expand its offering in on-demand audio. In the fourth quarter Spotify released 26 shows in markets outside the US amid booming demand from listeners.
“Spotify earnings demonstrate a positive outlook for the platform, but also the music streaming industry generally,” said Chris Beer, senior trends analyst at Global Web Index.
“As the results show, the company has ridden the crest of a wave with podcasts, making the platform a popular, easy-to-use hub for podcast listening just as they’ve broken into the mainstream.”
Spotify said it expected subscriber numbers to hit between 279m and 289m in the current quarter, with total revenue of up to €1.91bn.
Spotify remains the largest streaming platform, ahead of Amazon and Apple. However, it could be facing fresh competition from Chinese social media giant Tiktok, which is preparing to launch its own music streaming service.