Spotify adds less users than predicted in Q2

The figure, which fell short of the company’s target of between 366 and 373 million MAUs, represents a 22% growth compared to the same period last year. Spotify said the slow growth in MAUs is mainly due to a user sign-up issue on a global third-party platform that resulted in a “lighter user intake during the first half of the quarter.” However, the issue has been resolved.

Premium subscribers came close to the company’s prediction of between 162 and 166 million, with a 4% increase from the previous quarter to reach165 million subscribers, up 20% year-on-year. Revenues from the Premium subscriptions grew from €1.93bn to €2.05bn ($2.44bn) in Q2, representing a 6% increase from the previous quarter.

In terms of ad-supported subscriptions, Spotify added 2 million monthly active users in Q2 to reach 210 million. Ad-supported revenue outperformed its forecast, with €275m generated from the subscriptions, a 28% increase in comparison to the previous quarter and a 110% increase compared to Q2 in 2020. The performance was “driven by strong underlying demand (benefiting sell-out and pricing) and aided by favourable comps versus last year’s COVID-19 lows,” Spotify said, adding that “the strength in ad-supported revenue was led by our direct and podcast sales channels.”

Meanwhile, the average revenue generated from subscribers every month fell 3% to €4.29 year-on-year. However, the figure was flat at constant currency.

“Excluding the impact of FX [foreign exchange], we saw a benefit to ARPU [average revenue per user] from our Q1 price increases along with a marginal initial impact from Q2 price increases, offset by the impact of product mix shift,” Spotify said.

The company’s expectations for Q3 include total MAUs of between 377 and 382 million, and total revenue of €2.31 to €2.51bn.

Spotify founder CEO Daniel Ek said: “Q2 was a strong quarter for Spotify overall, with the majority of our major metrics performing better than expected. While MAU growth was softer than expected in the first half of the year, we are seeing that trendline reverse and all the leading indicators show that we are back on track.”

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