Soundcloud Losses Double In Latest Financial Report
February 10, 2016 at 12:36 PM (PT)
SOUNDCLOUD's recent filings in the U.K. indicate that the company's losses almost doubled from 2013-1014, after having increased 100% in 2013 from 2012, according to MUSICALLY.COM.
According to filings, the BERLIN-based company’s 2014 losses totaled $56.5 million. The company reported red ink to the tune of $29.2 million in 2013 and $15.7 million in 2012, which doesn't necessarily sound promising for its future solvency.
On the other hand, SOUNDCLOUD's revenues also grew from $14.1 million to $25 million from 2013-2014 (77%), which made for a wider margin of growth than the revenue increase from $10 million to 14.1 million between 2012-2013 (40%). Still, the company's reported 2014 revenues are still outweighed by its losses to a more than two-to-one ratio. To put it in perspective, cash flows out of the company almost equaled the $60 million of investment capital raised to keep it afloat the same year.
In the filing, the company's directors "have concluded that they have a reasonable expectation that the group will have adequate resources to continue in operational existence for the forseeable future," while concluding that there are "material uncertainties" facing the business.
Having recently signed a licensing agreement with UNIVERSAL MUSIC GROUP (NET NEWS 1/13) along with their previous deal with WARNER MUSIC GROUP (NET NEWS 11/4/14), SOUNDCLOUD rolled out several new features, including plans for a paid subscription service, intended to offset its losses by re-engaging its user base, but it remains uncertain what effect that will have in stabilizing the company.