Spotify Now Has 574 Million Active Users

Music streaming giant posted a net loss of €32 million on revenues of €3.4 billion in the quarter ending September 30.

Or, as Spotify put it, the quarter marked a “return to profitability.” Which is an interesting way to describe a net loss. But in looking over Spotify’s numbers and statements, I can see that this claim is based on €32 million in operating income in the quarter. Operating income is defined as net income minus non-operating expenses, such as interest and taxes. Apparently either can be defined as a “profit’ if the number is positive, but I’ve never seen a company use that number for this purpose.

“The business delivered strong results in Q3 as all of our key indicators exceeded guidance and we returned to profitability,” Spotify’s announcement reads. “Monthly Active Users were up 26% to 574 million and 2 million ahead of guidance. This represents our second largest Q3 net addition performance in history.”

The service now boasts 226 million paid subscribers, up 16 percent year-over-year (YOY), and 361 million ad-supported monthly active users (MAUs), up 32 percent, which explains that 574 million MAU figure. So about 39 percent of Spotify customers are paying subscribers.

As is always the case, those paying subscribers delivered far more revenue than the freeloaders: €2.9 billion of Spotify’s €3.4 billion in revenues came from paying subscribers in the quarter. Ad-supported MAUs delivered just €447 million in revenues. Premium and ad-supported revenues were up 10 and 16 percent, respectively, in the quarter.

It’s unclear if Spotify’s expansion into other audio services like podcasts and audiobooks has paid off or ever will. But the firm’s adjusted strategy now involves becoming the “world’s number one audio network,” and it revealed earlier this month that Spotify Premium, its paid subscription offering, would include instant access to 15 hours of audiobook streaming each month from a library of over 150,000 titles.