Music streaming service Spotify has announced its latest quarterly financial results. The company ended Q3 with 320 million monthly active users, having added 21 million during the quarter.
Meanwhile, Spotify’s subscriber total is now 144 million, up from 113 million a year ago, and 138 million at the end of Q2.
Spotify’s Q3 revenues grew by 14% year-on-year to €1.98bn, including a 15% rise in subscription revenues to €1.79bn. Despite the Covid-19 pandemic, advertising revenues grew by 9% year-on-year to €185m.
“Notably, some of our more mature regions exhibited accelerating user growth, our advertising business returned to growth, and new market launches in Russia and 12 surrounding markets unlocked significant pent-up demand, adding a helpful accelerant to our results,” said Spotify in its announcement.
There was more detail on the ongoing Covid-19 impact on music streaming. “From a content consumption standpoint, global consumption hours surpassed pre-Covid levels during the quarter, and all regions have fully recovered,” reported Spotify.
“Consumption trends by platform have returned to normal usage, including in-car listening hours which is now above the pre-Covid peak. Usage on connected devices inside the home, which saw a spike during lockdown, also remains above pre-Covid levels.”
Is Spotify profitable yet? An evergreen question with a still-red answer: no, it is not. However, the company did narrow its operating loss from €167m a year ago to €40m in its latest quarter, while its net loss fell from €356m to €101m over the same period.
Other things leaping out at us from the financials announcement:
– Spotify’s Russia and Eastern Europe launches in July were “stronger than expected”.
– The average revenue per user (ARPU) of a Spotify premium user is still falling: down 10% year-on-year to €4.19 in Q3.
– Spotify’s recent price rise for its Family subscription isn’t just an Australia thing: it’s also happened in Belgium, Switzerland, Bolivia, Peru, Ecuador, and Colombia.
– There are now 1.9m podcasts on Spotify, up from 1.5m in Q2. 22% of its monthly active users listened to podcasts last quarter – that’s around 70.4 million people, up from 62.8 million last quarter. Spotify launched 58 new ‘original and exclusive’ podcasts in Q3.
– An interesting nugget: “Despite the challenges stemming from the Covid-19 pandemic, we saw a 13% increase in new music releases compared with Q2 on our platform.”
– 750,000 artists and their teams are now using the Spotify for Artists tools.
– More details on how Spotify’s ‘two-sided marketplace’ of promotional tools for labels and artists is growing. “During Q3, we saw a 76% increase in unique customers relative to Q2, and we retained 74% of customers from Q2.” That’s customers paying to promote their music on Spotify: “We saw demand from both the Major labels and Indies…”
– Spotify expects to end 2020 with 340-345 million monthly active users and 150-154 million premium subscribers.