Pump the Volume

Pump the Volume

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  • 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.”


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