Spotify hits 226 million Premium subscribers

According to the financial results published on 24 October, there were 6 million net subscriber additions in Q3. That was up 16% year-on-year (YoY), and up by 3% quarter-on-quarter, on the 220 million that Spotify counted at the end of the prior quarter (Q2 2023). This growth translates into revenue of €2.9bn ($3.16bn) in Q3, which is up 16% YoY at constant currency.

Spotify’s total global monthly active users (MAUs) also grew 26% YoY to 574 million in Q3 2023 and by 4% (23 million) compared to the previous quarter (Q2 2023) when the platform counted 551 million MAUs.

The company added that its operating expenses fell by 8% YoY at constant currency, from €978m in Q3 2022 to €853m in Q3 2023, driven “primarily by lower marketing expenses and a decrease in personnel and related costs.”

Meanwhile, with 361 million users, the ad-supported service is growing at a faster rate than Premium – up 32% year-on-year and 5% quarter-on-quarter.

During Q3, there was outperformance against the guidance in all markets, led by North America and Latin America, despite price increases, with the company noting that there was “better than expected gross intake in markets that saw price increases.”

Total revenue increased by 17% YoY on a constant currency basis to €3.4bn. Operating income was €32m compared to operating losses in prior quarters this year.

Developments in the quarter included expanding its AI DJ to 50 more markets and the addition of a library of 150 000 audiobooks for Premium subscribers.

“Overall, we are pleased with our performance in Q3, and view the business as well positioned to drive continued progress towards delivering against our Investor Day goals,” Spotify told its shareholders.

Spotify forecasts reaching 601 million MAUs, an addition of about 27 million net new MAUs in Q4. The company also projects its total Premium subscriber base to hit 235 million in Q4, an addition of approximately 9 million net new subscribers in the quarter.

It also expects an operating income of €37m for Q4, and total revenue of €3.7bn.