Spotify has sharply increased its investment in research and development in 2022 compared to the prior year. In 2022, the company spent nearly 12% of its annual net revenue or €1,387 million on research and development compared to only 9% or €912 million in the prior year. The company has also experienced a significant increase in its Monthly Active User base and net revenue in 2022 compared to the prior year.
Spotify Research and Development Expenses 2014-2022
The following table shows the research and development expenses of Spotify Technology S.A. from 2014 to 2022. The amounts are in millions of Euros.
| Year | R&D Expenses ( € mn) |
| 2022 | € 1,387 |
| 2021 | € 912 |
| 2020 | € 837 |
| 2019 | € 615 |
| 2018 | € 493 |
| 2017 | € 396 |
| 2016 | € 207 |
| 2015 | € 136 |
| 2014 | € 114 |
Spotify is the world’s largest online music streaming network with a strong global presence. the company offers its services across 184 countries and territories, as of the end of 2021 compared to 93 countries and territories in the prior year.
In 2021, the company enjoyed strong growth its user base and financial performance. The user base of the company expanded to 406 million Monthly Active Users by the end of 2021 compared to 345 million at the end of the prior year. Its number of premium subscribers has increased to 180 million at the end of 2021 compared to 155 million at the end of 2020.
Spotify Technology S.A., the parent company of Spotify has experienced impressive revenue growth and market expansion in 2021 over the previous several years. Its success can be attributed to a large extent to the company’s focus on innovation. It devotes a significant sum to research and development each year. In 2021, its total research and development expenses increased to € 912 million compared to € 837 million at the end of 2020.
The total net revenue of the company for 2021 increased to € 9.7 billion compared to € 7.9 billion in 2020. Its gross profit improved to € 2.6 billion in 2021 compared to € 2 billion in 2020.
Spotify has made several acquisitions in its history, many of which were podcasting or related platforms. These acquisitions were mainly aimed at improving Spotify’s capabilities as a podcasting platform. The company is enjoying increased popularity as a podcasting platform also and offers a vast number of podcast titles (more than 3.6 million at the end of 2021) apart from around 82 million musical tracks.