(Hypebot) — UPDATED: Spotify reported solid Q4 this morning but offered conservative guidance that slower growth is ahead.
Spotify had 345 million monthly active users at the end of Q4, an increase of 27% from the same period a year ago. Paying subs grew to 155 million, up 24% over last year. Both stats beat most projections.
“Despite the global uncertainty of 2020, it was a remarkable year for Spotify. Following a strong Q2 and Q3, Q4 met or exceeded our guidance by nearly every metric,” Spotify said in a statement.
Sponsored music recommendations, the first major building block for Spotify’s “two-sided marketplace,” which charges artists and labels to market new releases increased 50% from the prior quarter. Billing was up 82% thanks in part to paid campaigns for Bad Bunny, Taylor Swift and Trippie Redd.
While “always aware of changes in the marketplace,” Spotify has no immediate plans to add social features or facilitate live concert streaming on the platform, said Spotify CEO Daniel EK responding to analysts’ questions during Wednesday’s earnings call.
EK went on to tout Spotify’s efforts to help artists during the pandemic including donations to COVID relief funds and the addition of live stream listings to its Artist pages.
Podcast consumption nearly doubled Y/Y and 25% of MAUs now engage with podcasts, up from 22% last quarter.
Slower Growth Ahead
There were signs that market conditions and shifts in strategy – including select price hikes and launching in South Korea without a free tier – may lead to lower user growth ahead.
“Although visibility is low right now” Spotify expressed confidence that they “can hit these numbers; numerous opportunities for upside to our forecast.”