Spotify Delivers Another Blockbuster Quarter

Spotify subscriber growth easily beat estimates in the quarter ending June 30, as the streaming music giant delivered double-digit profits and revenues.

“Our business continued to perform well in Q2, led by healthy subscriber gains, improved monetization and record profitability,” Spotify’s latest shareholder report explains. “Overall, we are encouraged by the traction we are seeing from our monetization initiatives and remain focused on delivering on the goals outlined at our 2022 Investor Day.”

Spotify reported operating income of €266 million on revenues of €3.8 billion for the quarter, with revenues up 5 percent year-over-year (YOY).

The service now boasts 626 million monthly active users (MAUs), up 14 percent YOY. Premium (paid) subscribers were up 12 percent in the quarter to 246 million, while ad-supported MAUs were up 15 percent YOY to 393 million. 88 percent of Spotify’s revenues, or €3.35 billion, came from its Premium subscribers (up 21 percent YOY), while ad-supported MAUs delivered €456 million in revenues (up 13 percent YOY).

Spotify’s margins were 29.2 percent in the quarter, up from 27.6 percent in the previous quarter. The company said that it improved the profitability of its music and podcast operations and benefited from various efficiency programs, but the gains were partially offset by costs associated with its audiobook operations.

Looking ahead, Spotify expects to add another 13 million MAUs in the current quarter, of which 5 million will be Premium subscribers. By comparison, it added 11 million MAUs overall and 7 million new Premium subscribers in the previous quarter.