(VIP-NEWS) — Spotify saw its revenue grow by 52% to €2.93bn in 2016.
However, according to documents just filed in Luxembourg, its annual net loss widened by 133% to a momentous €539.2m.
Before anything else, it’s worth delving into what contributed to this loss – which stood at €556.7m on a comprehensive basis (when further foreign exchange differences are taken into account).
Spotify’s operating loss in 2016 was €349.4m, widening 48% on 2015 – a smaller percentage figure, you’ll notice, than its overall revenue growth.
This operating loss was caused by business basics – such as investments in product development and growth, in addition to a €2.48bn cost of sales (mainly spent on royalty payments to labels and publishers).
Outside of that, Spotify suffered an unusually large €336.6m in ‘finance costs’ – a figure which was some €310m more expensive than the equivalent figure in 2015.
This €336.6m included Spotify’s cost of debt in 2016, plus a non-cash charge related to accounting treatment of its convertible debt.
And its this hefty finance-related blow which explains why there’s such a difference between the annual change in Spotify’s net loss (133%) and its operating loss (48%).
In fact, the company’s operating loss as a percentage of revenue was 11.9% in 2016 – versus 12.3% in 2015.