The company declined to say how many podcasts it added on the platform last year compared to Q3 2022 (when the total number of podcasts was 4.7 million).

But now that Spotify's podcasting arm has reached a point of maturity, it will focus on being more efficient, Ek said.

He warned that the first quarter of each year tends to yield the lowest gross profit margins, but that the numbers will improve throughout the year.īetween the lines: Spotify invested heavily in building its podcast business last year, spending generously on original shows and exclusive content that Ek has argued helps retain users and boost its advertising revenue.

The company's chief financial officer ,Paul Vogel, said investors should expect to see 'a meaningful improvement' in operating losses this year compared to last.

Yes, but: Executives declined to provide a timeline for when they think Spotify will become profitable. Ek admitted that the company 'had taken on a lot of headcount.'

The company's operating losses grew by 44% last quarter compared to the year prior.

While the company topped Wall Street expectations for user growth last quarter, its heavy investments in podcasts and its pandemic-era hiring spree continued to weigh on its profit margins.

So far in 2023, investors seem more optimistic that Ek will eventually be able to turn Spotify into a profitable business.ĭriving the news: Spotify reported its fourth quarter and full-year earnings on Tuesday, one week after announcing it would lay off 6% of staff - roughly 600 employees - amid broader cost-cutting measures. The streamer's share price dropped 60% last year as its losses widened.Why it matters: Heavy investments in technology, marketing and content helped fuel Spotify's top-line revenue and user growth in 2022, but weighed on the company's profits, frustrating investors.

Spotify CEO Daniel Ek will pivot his focus towards increasing the company's margins this year, but he doesn't plan to hold back on new investments in growth areas like audiobooks, he told Axios in an interview.

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