Spotify, the Swedish music streaming giant, achieved a remarkable financial milestone by reporting profitability for the entire year of 2024. This milestone was unveiled during the presentation of its latest quarterly figures, which showcased significant growth in both subscriber numbers and sales amidst a competitive market landscape.
By the end of 2024, Spotify had amassed 263 million premium subscribers, representing an impressive 11% increase compared to the final quarter of 2023. This surge in subscriptions, coupled with a substantial rise in advertising revenue, propelled Spotify’s quarterly earnings to over 4.2 billion euros, marking a nearly 20% year-over-year increase.
Spotify attributed part of its financial success to favorable exchange rates, which allowed the company to benefit from higher euro returns per subscription. The total number of individuals engaging with Spotify for music and podcasts reached 675 million, surpassing anticipated growth figures by 12%. Despite these successes, Spotify faced intense competition from major players like Apple Music, Amazon Music, and YouTube Music, all vying for market share with unique offerings and aggressive pricing strategies. Apple Music, for instance, has continued to expand its ecosystem with exclusive content and seamless integration across Apple devices. Amazon Music, on the other hand, leverages its extensive Prime membership base to attract listeners.
While Spotify’s quarterly profit fell slightly short of internal forecasts, achieving a record 477 million euros, it narrowly missed its target of 481 million euros. Nevertheless, Spotify reported an impressive 1.4 billion euros in profits for 2024, marking the first time in its 19-year history that it has recorded positive earnings in every quarter of the year.
Spotify’s recent success comes after a challenging 2023 marked by a 75 million euros loss. To address this, the company implemented workforce reductions and raised subscription prices in various markets, including the Netherlands. Their ability to adapt and innovate has been pivotal in maintaining their lead in a highly competitive industry.