News - 01/03/2018

Spotify is officially going public, despite having lost $1.4bn in 2017

Spotify is officially going public, despite having lost $1.4bn in 2017

After months of rumours, it's finally official: streaming giant Spotify filed its prospectus to begin trading on the New York Stock Exchange (under the name SPOT) with the US Security and Exchanges Commission. THe document reveals new data on the company’s questionable fiscal health.

According to thefiling, Spotify generated €4.09bn ($4.6bn) in revenues in calendar 2017 – but posted a €1.23bn ($1.4bn) pre-tax loss in the year. As "Music Business Worldwide" notes, Spotify’s operating loss didn’t grow dramatically last year (-€378m, up from -€349m in the prior 12 months), but the firm was hit by a stinging finance cost in 2017 of over a billion US dollars (€974m).

The filing also reveals that Spotify boasts 159 million monthly active users and 71 million paying premium subscribers as of January 1st. Also, Spotify has paid more than $9.77 billion to rights holders over the course of its 10-year existence.

Spotify openly warns would-be shareholders about its difficulty with profits in its ‘risk factor’ rundown within the prospectus, saying:

We have incurred significant operating losses in the past, and we may not be able to generate sufficient revenue to be profitable, or to generate positive cash flow on a sustained basis. In addition, our revenue growth rate may decline.. [...] Since our inception in April 2006, we have incurred significant operating losses and as of December 31, 2017, had an accumulated deficit of €(2,427) million.

Read the full document here.

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