Deezer has revealed its financial outlook for Q1 2023, with a 2.1% drop in paid subscribers compared to last year.
Deezer says its growth in its B2C segment helped offset the subscriber decline recorded in the rest of the world. B2C subscribers totaled 5.6 million on March 31, 2023—recording an increase of 2.3% for the segment.
Its French B2C subscriber base reached 3.5 million subscribers in the same period, up 9.8% for the region. In the rest of the world, B2C subscriber growth declined to 2.1 million for an -8.1% loss compared to 2022. Deezer says it is focusing on selected key markets to reduce unprofitable spend, likely impacting B2C subscriber acquisitions through 2022.
Deezer’s B2B segment saw its subscribers stand at 3.6 million at the end of the quarter, recording a decrease of 8.2%. Deezer attributes this decline to a decline of the subscriber base in the rest of the world, driven primarily by a legacy hard-bundled offer in Brazil not being included for new customers. So how are things looking for the rest of 2023?
Deezer says it will continue expanding its profitable growth strategy focused on new feature development to “fuel differentiation and further monetization.” It also aims to expand its B2B business with partnerships with Sonos (US), RTL (Germany), and DAZN (Italy).
For 2023, Deezer expects to see double-digit revenue growth in excess of 10% compared to 2022—driven by further expansion of its B2B segment. Deezer says it remains on a path to generate a positive cash flow in 2024 and achieve a positive adjusted EBITDA in 2025, all while delivering double-digit annual revenue growth over the period.
“Our revenue performance in the first quarter of 2023 was in line with our expectations on the back of a strong first quarter of 2022,” adds Jeronimo Folgueira, CEO of Deezer. “I am pleased with the continued expansion of our B2C subscriber base in France, the dynamism of our B2B business, where further growth acceleration is expected, as well as maintained ARPU improvements.”
“We are satisfied with the progress of our business in the first quarter, which gives us confidence that we will be able to continue to grow and significantly improve our adjusted EBITDA in 2023,” Folgueira adds.