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Q4FY19: Spotify has 96M paying users, 207M in total; India launch looming

Spotify’s MAUs grew 29% YoY to 207 million, based on growth in Latin America and other emerging regions, the company said during its Q4FY19 earnings. Users listened to over 15 billion hours of content during Q4 and its engagement across ad supported and premium users grew. It expanded to 13 more countries in the Middle East and North Africa in the quarter, taking its total to 78 countries.

Geographical distribution of MAUs

  • 36% in Europe
  • 30% in North America
  • 22% in Latin America
  • 12% from rest of the world

Premium subscribers

Premium subscribers were at 96 million, up 36% YoY owing to its Google Home promotion and annual Holiday campaign.

  • The Google Home integration was its first hardware bundling.
  • Over its 6 week Holiday campaign, it added 7 million subscribers, including 500,000 on a single day. In its Wrapped Holiday campaign, it saw 28 million users visit “spotifywrapped.com” in 1 week, up from 20 million total last year.
  • Growth in family and student plans “healthy” with a declining churn of over 30 bps YoY

Geographical distribution of premium subscribers

  • 40% in Europe
  • 30% in North America
  • 20% in Latin America
  • 10% from rest of the world


Spotify’s revenues for Q4 were €1,495 million, up 30% YoY. Of this:

  • its Premium revenues were €1,320 million, up 30% YoY, and
  • Ad-Supported revenues were €175 million, up 34% YoY, as compared to 30% YoY growth in Q3 FY19.


  • Average revenue per user (ARPU) was €4.89, a 7% YoY decline (6% excluding the impact from foreign exchange rates) – decline attributed to “product mix” (Family Plan and Student Plan as a percentage of the total base), “market mix” where growth in “relatively lower ARPU markets is outpacing geographies with higher ARPU.”
  • Lifetime Value per Subscriber (“LTV”) has remained constant YoY
  • Audio and Video format ads grew 40% in Q4
  • It had operating expenses of €305 million, down 17% YoY, resulting in an operating profit of €94 million.
  • Free Cash Flow of €150 million in net cash flows from operating activities and €84 million in Free Cash Flow in Q4, up 12% YoY.
  • €1.8 billion in cash and cash equivalents, restricted cash, and short term investments.
  • As of December 31, it had 4,165 full-time employees and contractors globally. It hired heavily in it Research & Development teams with more than 40% of headcount additions in that area.

Other highlights

  • Spotify will spend $400-500 million on acquisitions in 2019. Podcasts are driving its growth, and it acquired Gimlet Media, a podcast producing company, and Anchor, a podcast tools company, to get into podcasting.
  • Over 300,000 creators use its Spotify for Artists monthly
  • It launched Spotify for Podcasters on 3 October 2018, and over 10,000 podcasters are using this tool monthly
  • Over 185,000 podcast titles available: of this, 14 titles exclusive to Spotify including the 2nd season of Crimetown, The Rewind with Guy Raz, and the Dissect Mini Series hosted by Lauryn Hill.
  • On November 8, 2018 it launched Spotify Publishing Analytics in Beta, for publishers, giving daily streaming statistics for the works and recordings they have identified, including playlist performance, and the ability to view data for each of the songwriters on their roster. Over 1,000 music publishers around the world requested access to the beta version of the site within the first two weeks of launch.
  • On November 5, 2018, Spotify announced a program to repurchase up to $1.0 billion of its publicly traded shares. During Q4, the company repurchased 687,271 shares at a total cost of $87.3 million and an average cost of $127.01 per share.

Notes from the investor call

Daniel Ek, CEO, Spotify:

  • “We believe that over time more than 20% of all listening on Spotify will be non-music content, and we strongly believe that this opportunity in audio starts with podcast.”
  • On launching in India: “Specifically, related to the Indian market, I think we’re seeing it’s a very healthy ecosystem of both homegrown players, but also international players being successful in the marketplace when it comes to other sectors… it makes us feel comfortable that we have a good chance of being a very, very strong player in the Indian market.”
  • On programmatic and self serve revenues: “Programmatic is growing super fast, and we are seeing shifts in our most developed markets like the US and the UK, Australia, New Zealand, from direct to Programmatic. Self-serve is our fastest growing channel. So in that way, it’s additive to the overall performance of the business, but even notwithstanding that fact it’s still relatively small in the grand scheme of things. So, we continue to invest aggressively from an R&D perspective in growing that channel. We need that channel to be successful for us over time in order to right size our cost structure, but we’re starting off a very small base.”

Download: Shareholder letter | Earnings call transcript

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