Streaming giant Spotify yesterday reported second-quarter results that comfortably beat expectations for both monthly active users and subscribers, and forecast the number of listeners each month would reach 572 million this quarter.
However, quarterly revenues came in below estimates, according to IBES data from Refinitiv, and the company also posted a bigger than expected loss, a Reuters report from Stockholm stated.
After laying out plans last year to get 1 billion users by 2030 and to reach $100 billion of revenue annually, Spotify has been growing rapidly, but its costly expansion into podcasts and audiobooks has hit margins.
The number of monthly active users rose to 551 million in the second quarter, beating Spotify’s guidance and analysts’ forecast of 526.8 million.
Premium subscribers, who account for most of the company’s revenue, rose 17 percent to 220 million, topping estimates of 216.6 million, according to IBES data from Refinitiv.
“It’s the sixth consecutive quarter now that user growth has been doing incredibly well, and it’s the gift that keeps giving,” CEO Daniel Ek told Reuters.
However, quarterly revenue was 3.18 billion euros ($3.51 billion), below analysts’ estimate of 3.21 billion euros. That was in line with Spotify’s own estimates.
“If we have user growth, the revenue growth eventually comes – that’s the lesson been learned at Spotify and we have seen it over and over,” Ek said.
Spotify on Monday raised prices for its premium plans across several countries but expects those increases to have a minimal impact on revenue this quarter.
Chief Financial Officer Paul Vogel said the increase would start to take effect from September with respect to billing cycles. “In Q4, we will have the entirety of the price increase,” he said in an interview.