Spotify (SPOT) reported Q4 financial results Tuesday, with a wider-than-expected loss but beating expectations on gross margins. Total monthly active users (MAUs) of 489 million exceeded forecasts of 478 million, with both premium and ad-supported subs surpassing estimates.
To improve efficiency and gross margins, 600 employees were laid off and costs were trimmed. The company forecasted 500 million monthly active users this quarter.
Spotify's Q4 gross margins beat expectations of 24.5%, reaching 25.3% due to lower investment spending and favorable music trends.
Why it matters
Earlier this month, Spotify announced plans to cut 6% of its global workforce as it contends with a gloomy economic environment that has caused consumers and advertisers to limit their spending. The cuts impacted about 600 employees. CEO Daniel Ek wrote a note to employees, which was posted publicly on the company’s website, and said he takes “full accountability for the moves that got us here today.”