Spotify turned in strong numbers for the second quarter, beating expectations for total and paid subscriber adds and reporting 23% revenue growth.
Monthly active users grew 19% to 433 million, a net gain of 19 million in Q2 and 5 million above guidance — Spotify’s largest ever Q2 growth. The company attributed the gains to reactivations in Europe and “Gen Z strength in Latin America.”
Spotify’s Premium Subscribers grew 14% to 188 million, topping its guidance by 6 million, “aided by promotional intake and household plans,” the company said in announcing results.
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Total revenue was €2.9 billion, up 23%, and ad-supported revenue jumped 31% to €360 million, reaching an all-time high as a percentage of total revenue at 13%. Spotify reported a net loss of €125 million for the period.
Spotify’s previous guidance was to hit 428 million monthly users and 187 million paying subs, with revenue of €2.80 billion and a net loss of €197 million.
In a June 15 memo, Spotify chief Daniel Ek told staffers the company was trimming hiring plans by 25% amid broader economic uncertainty.
By 2030, Spotify expects to top 1 billion users worldwide, more than double its current count, company execs said at its investors day event last month. It also revealed that Spotify’s podcast business generated nearly €200 million in revenue in 2021, with a negative gross margin of -57%. The podcast losses will be even higher this year, peaking in 2022, according to CFO Paul Vogel; in the next five years, Spotify sees the podcast business turning a profit with gross margins of 40%-50%.
At the end of Q2, Spotify had 4.4 million podcasts on the platform. The number of monthly users who engaged with podcasts grew in the “substantial double digits” year over year. Spotify released 100 new original and exclusive podcasts globally in Q2, calling out DC/Warner Bros.’s “Batman Unburied” as a hit after reaching No. 1 in several markets.
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