Spotify on Wednesday reported its fourth-quarter financial results. The announcement came amidst the controversy surrounding Joe Rogan’s popular podcast that saw the streaming platform lose billions in market value and musicians withdrawing their music.
Rogan was accused of repeatedly spreading misinformation about Covid on his show. Reacting to the outcry from its users, Spotify announced that it was working to add a content advisory to any podcast episode that includes a discussion about COVID-19.
‘’This advisory will direct listeners to our dedicated COVID-19 Hub, a resource that provides easy access to data-driven facts, up-to-date information as shared by scientists, physicians, academics and public health authorities around the world, as well as links to trusted sources,’’ it said.
That said, Spotify ended 2021 with strong Q4 results, reporting some quite impressive numbers. This was led by outperformance in Monthly Active Users, continued momentum in its subscription business, and meaningful advertising results.
‘’Looking back on not just this quarter, but the past few years, we are increasingly excited about the investments we have made and see meaningful progress within a number of our initiatives. As we move into 2022 and beyond, the opportunities in front of us are large and we see a tremendous amount of greenfield on the horizon.’’ it said in a statement.
Total Monthly Active Users grew 18% Y/Y to 406 million in the quarter, up from 381 million in Q3 and near the top end of our guidance range. Spotify reported a double digit Y/Y growth in all regions with particular strength in the Rest of World, which was led by strong results in India and Indonesia.
On December 1, 2021, it successfully launched the 7th annual year-end Spotify Wrapped campaign to users in 103 markets. Collectively, 120 million MAUs engaged with Wrapped content in Q4 (up 29% Y/Y) and there was strong Y/Y growth in engagement across all regions and demographics. The campaign trended worldwide with nearly 60 million shares of Wrapped stories and cards, triggering significant levels of consumption across its two personalized playlists (Your Top SongsandYour Artists Revealed) which were responsible for almost 8% of total on-platform consumption hours within 48 hours of launch.
Spotify’s Premium Subscribers grew 16% Y/Y to 180 million in the quarter, up from 172 million last quarter. All regions contributed to growth, led by Europe and Latin America on an absolute Q/Q basis.
Spotify’s revenue of €2,689 million grew 24% Y/Y in Q4 due to significant strength in advertising and favorable FX movements. Premium Revenue grew 22% Y/Y to €2,295 million while Ad-Supported Revenue was particularly strong, growing 40% Y/Y to €394 million.
Within Premium, the average revenue per user (“ARPU”) of €4.40 in Q4 was up 3% Y/Y. Excluding the impact of FX, Spotify says it saw a benefit to ARPU primarily from our price increases.
Ad-Supported Revenue reached a record 15% of total revenues in the quarter and continued to benefit from higher sold impressions, increased CPMs, and growing demand within the Spotify Audience Network.
At the end of Q4, Spotify had 3.6 million podcasts on the platform (up from 3.2 million at the end of Q3). The platform recorded a double digit increase in the number of monthly active users that engaged with podcast content relative to Q3. Among monthly active users that engaged with podcasts in Q4, consumption trends remained strong (up 20% Y/Y on a per-user basis).
Spotify also expanded our paid podcast subscriptions to creators and listeners in 33 additional markets and enabled podcasts for users in Russia, Egypt, and Saudi Arabia.
During the quarter, it accelerated our entry into the audiobook space through the announcement of the agreement to acquire Findaway, a global leader in digital audiobook distribution. The closing of the transaction is subject to regulatory review and approval.