Spotify Technology S.A. published its second quarter financials for shareholders. It reported that total monthly active users grew 22% Y/Y to 365 million in the quarter, adding 9 million MAUs. Though MAU was lower than the guidance range, performance as better than expected in the areas of subscriber growth, revenue, gross margin and operating income.
Global consumption hours continued to grow in Q2 on a Y/Y basis. On a per user basis, global consumption levels returned to Y/Y growth in the quarter, led by gains in developed regions such as North America and Europe.
Premium Subscribers grew 20% Y/Y to 165 million, adding 7 million subscribers in the quarter. Spotify said it saw strong performance of its standard product across Europe and North America.
The company added or expanded several major promotional partnerships in the quarter, including promotions with Samsung (3-month trials in 73 markets to all new and existing mobile/speaker/wearable and appliance devices), Microsoft Gamepass (3- or 4-month trials in 15 markets), Epic/Fortnite (3-month trial in 25 markets), Paypal (3-month trial in 10 markets), Vivo (3 month trial in Brazil) and TikTok (3- or 4-month trial across 7 countries in EMEA).
Revenue of €2,331 million grew 23% Y/Y in Q2 (or 28% Y/Y on a constant currency basis). Spotify noted that the growth was due to “significant advertising strength and subscriber outperformance.” Premium revenue grew 17% Y/Y to €2,056 million (or 20% Y/Y constant currency) while ad-supported revenue grew 110% Y/Y to €275 million (or 126% Y/Y constant currency).
Spotify Audience Network launched in the United States in April, increasing its monetizable podcast inventory in the U.S. by nearly 3x. The Spotify Audience Network expanded in July to include Australia, Canada and the United Kingdom.
A new initiative for the quarter was a soft-launch of Spotify Greenroom, a mobile app that allows users to join or host live audio rooms, and optionally turn those conversations into podcasts. Spotify hopes to do a full commercial launch of the app later this year, with an initial focus on sports, pop culture, music and entertainment.
Spotify also began rolling out the paid subscription platform for podcasters in the U.S. Additionally, it grew its partners for the Spotify Open Access platform strategy, an effort to open the platform to third-party paywalled content with the goal of becoming the world’s leading audio browser. The company also continued to make things easier for users, including improvements to the search function; a new version of Your Library to mobile users; a new miniplayer that allows listeners to share, explore and discover audio from Spotify directly within Facebook; and capability to download playlists, albums and podcasts to the Apple watch.
