Spotify Revenue Returns, Paid Subs Hit 144M
Spotify monthly active users hit 320 million in Q3 2020, as paid subscribers rose from 138M to 144M in the quarter.
Monthly active users grew 29% year over year with subscribers growing 27% in the same time period. US and EU subscriber growth was just 4% in the US and 1% in the EU respectively. Most user growth came from new and emerging markets.
Revenue recovered slightly beating forecasts. Overall, Spotify delivered a solid performance, particularly during a global pandemic,
“Spotify’s flywheel is accelerating faster with every new user and creator that comes on our platform,” said Spotify CEO and founder, Daniel Ek. “We’re building the world’s largest audio network and it’s clear that our strategy is working.”
Q3 Highlights
- Key Metrics:
- 320M MAUs, above the top of the guidance range
- Subscribers of 144M, at the very top of the range
- Gross Margin better than expected at €103M of FCF
- Revenue was in line with the guidance on a reported basis:”While Foreign Exchange (FX) created a 500 bps headwind to growth, normalizing for FX, we would have slightly beat our forecast.”
- Advertising outperformed the company’s forecast, exhibiting a return to growth following the impact of the pandemic in Q2
- “Launch in Russia and 12 surrounding markets unlocked significant pent-up demand”
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