Thank You For the Music: Spotify’s CFO announces departure
November 29, 2019
2 min read
What's going on here?
In a high profile exit, Spotify’s Barry McCarthy has announced that he will no longer continue his role as CFO of the streaming giant by January 2020.
What does this mean?
McCarthy will step down from his role as CFO (chief financial officer) from Spotify this coming January; he will be replaced by current head of financial planning and analysis, Paul Vogel.
After three years in the senior management of Spotify, McCarthy is likely to join the company’s board of directors once he has retired from his current role. This arguably represents a major shift in the company’s leadership, given McCarthy’s pivotal role in mobilising Spotify’s unorthodox direct listing in 2018 and guidance of the company ever since. Under the incoming leadership, it also remains to be seen how Spotify will change in its business targets, if at all.
What's the big picture effect?
While Spotify’s shares have fallen more than 25% of its opening price when the company went public, the corporation is still doing well in many other respects. The announcement of McCarthy’s departure does not seem to have had an adverse effect on the company thus far.
The streaming service posted better than expected results all around for its third quarter performance, with an additional 5 million subscribers, 248 million active users and revenue of £1.5 billion, a year on year increase of 28%. Furthermore, the fall in share prices has been attributed to Spotify’s ongoing investment in podcasts, arguably a lucrative means of future growth for the company. The number of podcast hours streamed have gone up by 40% as a result, with 14% of Spotify’s paid subscribers using the service.
This sustained growth against an increasingly competitive market is indicative of McCarthy’s efforts with the company; a legacy which will surely last even as he leaves Spotify’s C-suite. His pioneering success with the direct listing have already led to Slack, the messaging app, following suit and Airbnb reportedly considering a direct listing next year as well (for more information see our article on that here).
As Spotify moves into the next phase of its development, McCarthy’s contributions will loom large over Vogel as he takes on the role next year. While the company is growing from strength to strength at present, we will have to observe how Vogel will influence the strategic direction of the business. Spotify continues to face stiff competition from Apple Music, making it worthwhile for investors to keep an eye on how the company progresses from here.
Report written by Debra Lim
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