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Spotify’s Loss Widens Despite Big Jump in Revenue

Spotify’s operating loss rose significantly to between 300 million and 400 million euros last year, the music streaming company has told its investors, from 184 million euros in 2015. That’s despite a 50% increase in revenues to 2.9 billion euros ($3.1 billion), according to two people briefed on its numbers.

The wider loss spotlights longstanding questions about Spotify’s ability to turn a profit, as it prepares to go public at a valuation that could reach $13 billion.

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UPDATE: This story has been updated to include a comment from a person close to Spotify on the 2016 gross margin. 


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Shawn Wang and David J. Hochman commented on this article.
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One investor cited the low gross margins as the biggest concern about the company. The lower the margins, the more the company needs to grow before it can break even and cover operational expenses such as sales and marketing.