SoundCloud Reaches Annual Profitability for the First Time in 16-Year History
SoundCloud is set to turn an annual profit for the first time since the company's 2007 inception, Music Business Worldwide reports.
SoundCloud CEO Eliah Seton said the German music streaming company reached a positive €2 million EBITDA (earnings before interest, taxes, depreciation and amortization) this year on the back of projected annual revenues of €288 million. That's a sharp increase from last year, when they finished with a negative €29 million EBITDA.
The report goes on to state that SoundCloud credits the growth to a surge of user subscriptions and increased ad revenue. The company also saw a rise in fees generated from artist tools on the platform.
It's worth noting that the record profits did come at a cost to some of SoundCloud's workers. Despite growth in various sectors, the company laid off 8% of their staff, resulting in about 40 individuals losing their jobs as the organization chased profitability.
"Reaching profitability matters because it reinforces that we are pursuing the right strategy and have taken the necessary steps to turn around the business," Seton told MBW.
The news arrives after Spotify cofounder and CEO Daniel Ek slashed 17% of the streaming giant's workforce, citing a nebulous "gap between our financial goal state and our current operational costs."
