Spotify growth strong, but CEO sees 'tremendous opportunity' to improve monetization
At the 2023 Goldman Sachs Communacopia & Technology Conference on Wednesday, Spotify (NYSE:SPOT) CFO Paul Vogel told listeners that the company has experienced «exceptional growth» over the last 12 months.
Over the last trailing 12 months, the firm has added 120 million monthly active users and 32M subscribers. During that 12-month period, the company's share price has risen more than 53%, trading above the $160 mark.
«If you go back over any five-year period of time and average 12 months, we normally average around 71 million growth in users and around 27 million growth in subscribers,» stated Vogel. «So we've seen this really impressive and significant acceleration in the user and subscriber growth.»
The Spotify CEO said the growth is due to a number of factors, including the company's continued innovation, noting Spotify's AI DJ product, which he later added has been one of the most successful product launches for the company in a long time.
The reacceleration in Spotify's growth is also down to the expansion of markets, Vogel stated, with the company getting past the initial threshold once entering those new markets and now starting to see the acceleration. Spotify also noted positive trends in North America and Western Europe.
However, Vogel still believes there is a «tremendous opportunity» for SPOT to improve monetization in developing and developed markets.
Looking ahead, Spotify is aiming to accelerate revenue growth to 20% while it is also looking at ways to improve monetization through advertising, especially in its podcast segment. In addition, it aims to become more efficient over the next 12 months, noting that AI could help in certain areas to make that happen.
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