SoundCloud revenue tops $200m

This is according to the Music Business Worldwide (MBW) publication, which reported on SoundCloud's financials on Friday. The Berlin-based streaming company has recovered significantly after it was forced to downsize its staff to ensure business continuity in 2017. But in 2018 the service reported a turnover equivalent to $127m. With total revenues up 19% year-on-year, this meant the company had exceeded its financial growth targets when many had written it off.

SoundCloud’s annual operating losses decreased from €51.4m to €32.9m ($38.7m) in 2017 and 2018, respectively. And post-tax losses dropped from €63.8m to €32m in 2017 and 2018, respectively.

“SoundCloud’s 2018 annual report filed with Companies House shows substantial revenue growth and continued loss reductions vs 2017,” a SoundCloud spokesperson told MBW.

“2019 results will be filed later this year, but we are pleased to report SoundCloud surpassed its full-year growth plans for the second year in a row [in 2018], increasing revenue to $127m (€108m). We look forward to continuing to grow SoundCloud’s unique creator-driven ecosystem and business in the year ahead.”

Also in 2017, the firm's co-founder, Alexander Ljung, said the company would have to cut costs, grow existing advertising and subscription revenue streams and focus on its unique competitive advantage.

The music streaming service says it now boasts more than 200 million tracks on its platform, and the key drivers of growth for 2018 included:

“The expansion of its SoundCloud Premier monetisation, which distributes the work of ‘tens of thousands of creators’. (Unlike Spotify, SoundCloud still offers its Premier customers a service to distribute their music to both SC and its rival platforms),” MBW quoted SoundCloud as saying.

“Improvements to SoundCloud’s interactive listener experience, including the ability to comment directly on tracks in the mobile application, higher-quality streaming and hand-picked, curated playlists.

“Partnering with Pandora as SoundCloud’s exclusive US advertising and sales partner, creating ‘the largest digital audio advertising offering in the U.S. reaching a combined audience of more than 100 million’.”

SoundCloud also reduced its administrative expenses by 22.9%, from €75.5m to €58.2m in 2017 and 2018, respectively. After downsizing on its staff in 2017, the company’s total expenditure on wages and salaries dipped from €34.5m in 2017 to €25.8m in 2018.

About 69.6% of the company’s total revenue came from the US market, a slight reduction from 71.1% in 2017. This suggests the company’s user base is becoming more international.