Spotify (NYSE: SPOT) reported its financials for Q4 and full-year 2024, posting quarterly revenue of €4.24 billion, representing a 16% increase from €3.67 billion in the same period of 2023 and a 6% rise over €3.99 billion in the prior quarter.
Cost of revenue climbed to €2.87 billion from €2.69 billion a year earlier and €2.75 billion last quarter, primarily due to rising content and distribution expenses. Even so, gross profit jumped to €1.37 billion from €980 million in Q4 2023 and €1.24 billion in Q3 2024, bringing gross margin to 32.2%, beating its own guidance.
Operating expenses landed at €891 million, down from €1.06 billion in the comparable quarter last year but up from €786 million in the previous quarter. The year-over-year decline owes largely to reductions in R&D (which fell to €376 million from €468 million) and sales and marketing (down to €393 million from €432 million). General and administrative expenses came in at €122 million, below last year’s €155 million and marginally above the €112 million recorded in the prior quarter. In total, operating income jumped to €477 million, a stark contrast to the €75 million loss logged a year ago and an improvement over the €454 million earned in the previous quarter.
However, it is worthy to note the €96 million bump in the profit from additional Social Charges stemming from higher share prices.
Quarterly net income came in at €367 million, compared with a €70 million net loss in the same period of 2023 and a €300 million net profit just three months earlier. Basic earnings per share finished at €1.81, up from a loss per share of €0.36 last year and an improvement from €1.49 in the prior quarter.
For the full year, revenue rose to €15.67 billion in 2024 from €13.25 billion in 2023, while cost of revenue increased from €9.85 billion to €10.95 billion. Gross profit expanded from €3.40 billion to €4.72 billion, and total operating expenses dropped from €3.84 billion to €3.36 billion, enabling operating income to swing from a €446 million loss to a €1.37 billion profit.
Net income moved from a €532 million loss to €1.14 billion on a comparable basis, reporting its first year of profitability. Free cash flow also spiked to €2.30 billion in 2024 from €680 million in 2023.
Monthly active users also rose 12% year over year to 675 million, exceeding the company’s estimate of 665 million, while premium subscriptions also outpaced internal and external forecasts by reaching 263 million.
For 2025, Spotify forecasts €4.2 billion in revenue in Q1, along with 678 million monthly active users and 265 million premium subscribers.
Information for this briefing was found via the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
