Spotify Q4 2019 Earnings Great Year for Premium, Less So for Ad Supported

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The 20,000 Foot View:  2019 was another strong year for Spotify’s premium business, in which it saw off growing competition to retain its leading global market share. But it was also another year in which Spotify’s ad-supported business did not grow fast enough.

Key Insights

• Spotify finished 2019 with        million subscribers, up        on 2018 and adding three million more new subscribers than it did in 2018 
• Full-year (FY) 2019 premium revenue was also up        to        billion, but when churned-out subscribers are factored in, monthly average revenue per user (ARPU) fell from        FY 2018 to        FY 2019
• Latin America and Rest of World contributed slightly less to global subscriber growth in 2019        compared to        in 2018
• Ad-supported user growth accelerated markedly in 2019, with        million new users added compared to        million in 2018
• Spotify finished 2019 with        million ad-supported monthly average users (MAUs), with a reduced paid conversion rate of       
• 2019 was the breakout year for Rest of World, with the region increasing its share of ad-supported MAUs from        in 2018 to        in 2019, representing        of 2019 growth
• Premium gross margin continued steady recovery to        in        2019 while ad-supported gross margin headed in the opposite direction, dropping to       
• Churn management – one of Spotify’s standout success stories – continued its long-term improvement in 2019, reaching        for FY 2019

Companies and brands mentioned in this report:  Spotify