Spotify added 10 million premium subscribers in 2022

This represents a year-on-year increase of 14% and brings the number of net additions for the whole year to 25 million.

The numbers, contained in Spotify’s Q4 2022 and full-year financial report released on Tuesday, bring the company’s paying users to 205 million.

The streaming giant said the growth was aided by promotional intake and household plans, with the total increase falling short by 2 million following the company’s withdrawal from Russia.

Spotify now has 489 million freemium and premium monthly active users (MAUs), up 20% year-on-year. Ad-supported MAUs were up 25% to 295 million.

The growth exceeded Spotify’s outlook by a net addition of 3 million subscribers.

The report shows that premium subscriber growth outperformed the company’s guidance across all regions, led by Latin America.

The increase across nearly all regions has been attributed to its eighth annual Wrapped campaign whose user engagement grew 30% year-on-year across 111 markets.

The company said there was strong MAU growth among Gen Z listeners.

In terms of finances, the company’s total revenue grew 18% year-on-year in Q4 to €3.17bn. For the 12 months, revenue increased 21.3% to €11.73bn. Spotify’s ad-supported revenue in Q4 2022 was €449m, up 14% year-on-year, led by podcasting gains.

During Q4, the company’s operating expenses grew 44% year-on-year – 36% at constant currency – driven primarily by higher personnel costs related to headcount growth.

Spotify made an operating loss of €659m during the 12-month period due to what it terms as “higher personnel costs primarily due to headcount growth and higher advertising costs”.

Spotify’s 2023 Q1 outlook is to reach 500 million MAUs and 207 million premium subscribers.

The company recently cut its global workforce by about 6% due to economic uncertainty in the tech industry.