Spotify (SPOT) earnings Q4 2022

Spotify shares are up as much as 10% on Tuesday after the company reported it Fourth Quarter Results which exceeded analysts’ revenue expectations and showed strong user growth.

Here’s how the company did it:

• Loss per share: Loss of 1.40 euros ($1.52) versus an estimated loss of 1.27 euros, as expected by analysts, according to Refinitiv
• revenue: 3.17 billion euros versus 3.16 billion euros expected by analysts, according to Refinitiv

Spotify reported 489 million monthly active users for the quarter, up 20% year over year. During the quarter, there were 33 million net additions to monthly active users, a record high for the company. Spotify also reported 205 million paid subscribers, up 14% from a year ago.

In his Third quarter report, the company said it expects to add about 23 million new monthly active users in the fourth quarter, bringing its total to 479 million. It had also expected its revenue to increase to €3.2 billion and record 202 million paying subscribers in the quarter.

Spotify continues to invest in advertising, and its ad-supported revenue grew 14% year over year and accounted for 14% of total revenue. The company said the growth was driven by podcasting.

Earlier this month, Spotify announced plans to shed 6% of its global workforce as the company grapples with a grim economic environment that has prompted consumers and advertisers to rein in spending. Around 600 employees were affected by the cuts.

CEO Daniel Ek wrote a Notice to employees, which was published publicly on the company’s website, saying he takes “full responsibility for the steps that got us here today.”

“In hindsight, I was too ambitious to invest ahead of our sales growth,” he said.