Music streaming service, Spotify has announced its plan to go public. The company will begin trading on the New York Stock Exchange under the ticker name SPOT.
Spotify is the leader in streaming music services globally, with the company reporting 71 million paying subscribers and more than 159 million monthly active listeners as of December 2017. It is available in 61 countries and territories. Its closest competitor, AppleMusic, is far behind at 36 million subscribers.
The company reported revenue of $2.37 billion in 2015, $3.6 billion in 2016 and $4.99 billion in 2017. It said paid subscribers are growing at a rate of 46 percent year-over-year, while MAUs are increasing at 29 percent year-over-year.
The company posted a loss of $1.5 billion in 2017, $1 billion of which was from a non-recurring expense due to convertible notes from a transaction with Tencent in December 2017. It had an operating loss of $461.3 million last year, and $425.9 million in 2016.
The company faces significant challenges to its business model, including risk from fluctuating and unpredictable royalty rates it pays to music labels, publishers, and songwriters.
“We set out to reimagine the music industry and to provide a better way for both artists and consumers to benefit from the digital transformation of the music industry,” the company said in its filing. “Spotify was founded on the belief that music is universal and that streaming is a more robust and seamless access model that benefits both artists and music fans.”
Spotify’s initial offering of shares will not be underwritten, meaning there is no set price set by underwriters which will inform opening trades on the New York Stock Exchange. Goldman Sachs, Morgan Stanley and Allen & Company are advising Spotify on the offering.
