Spotify closed 2024 with a historic milestone: its first full year of earnings after years of balancing between occasional gains and consecutive quarters in the red. And it did so while expanding beyond music.
Why it matters. Not only did the company end its first year in the black, but it proved it can be profitable without sacrificing growth. This comes as Wall Street demands results from tech companies, showing little patience for future promises.
- Six years ago, Spotify turned a profit for the first time.
- Now, it has achieved its first fully profitable year.
The numbers
- 675 million monthly active users (up 12% year-over-year).
- 32.2% gross margin (a record).
- $493 million in operating profit.
- $10 billion paid to the music industry ($60 billion since its launch).
The context. Spotify has been quietly but radically transforming. It’s no longer just a music streaming platform—and likely never will be again. Its catalog now includes:
- 6.5 million podcasts.
- 330,000 video podcasts.
- 350,000 audiobooks.
According to the company, 270 million users have consumed video content.
This shift is a major opportunity. Spotify keeps users engaged while offering content that doesn’t require hefty royalty payments—a win-win. On top of that, its bet on advertising is paying off.
Between the lines. Spotify’s strategy goes beyond audio. It’s building a full creator ecosystem, following a model similar to YouTube’s. In its earnings report, the company highlighted key milestones:
- 70% of eligible programs participate in its affiliate program.
- The number of video creators is growing by more than 50% annually.
- Diversification reduces reliance on record labels.
What’s next? The question is whether Spotify can sustain this profitability, especially amid fierce competition for user attention from TikTok, Apple and YouTube, which is doubling down on podcasting.
Spotify CEO and founder Daniel Ek has a broader vision: “We will continue to focus on initiatives that have long-term impact.” This profitability may just be the first step in a deeper transformation of its business.
Image | Thibault Penin (Unsplash)
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