Spotify is all about accentuating the positives in its latest quarterly financial results. The Sweden-based streaming service announced on Wednesday that it ended 2018 with double-digit revenue growth and 96 million paid subscribers, as well as a major, previously elusive milestone: the company's first operating profit to date.
Total revenue for the quarter ended Dec. 31 was €1.495 billion ($1.7 billion, an increase of 30 percent year-over-year and 11 percent compared to last quarter. Of that revenue tally, the vast majority (€1.32 billion / $1.5 billion) came from premium subscribers, an increase of 11 percent quarterly; ad-supported revenue totaled €175 million ($199 million), an increase of 34 percent y/y and 23 percent since Q3. The company noted that both audio and video format ads grew by more than 40 percent in Q4, aided by new cost-per-completed-view pricing for video inventory.
Operating expenses totaled €305 million ($347 million) in Q3, down from €348 in Q4, resulting in an operating profit of €94 million ($107 million). That amounts to Spotify's first-ever quarterly profit (last quarter's losses were only €6 million). During the quarter, the company generated €150 million ($170) in net cash flows from operating activities and €84 million ($95 million) in free cash flow, up 12 percent y/y. It is reporting €1.8 billion ($2 billion) in cash and cash equivalents, restricted cash, and short term investments, the same figure as the previous quarter.