Spotify Q2 losses deepen; Premium subscribers soar to 220 million

Despite experiencing growth in premium subscribers, Spotify's net loss for the second quarter this year was 302 million euros, surpassing the loss of 125 million euros from the same period last year.

The platform experienced a 27% year-on-year increase in total Monthly Active Users (MAUs), reaching 551 million compared to 515 million in the previous quarter.

The company also reported ongoing enhancements in ad-supported retention and performance marketing efficiencies, as well as significant growth among GenZ listeners. For Q3, Spotify has projected the total MAUs to reach 572 million.

Premium subscribers, numbering 217 million, exceeded expectations by increasing another 17% compared to the previous year, reaching a total of 220 million. The ad-supported MAUs reached 343 million in Q2 2023 as compared to 317 million in Q1 2023.

Total revenue grew 11% YoY to 3.2 billion euros, in-line with guidance.

Due to the recent price increase in its services across various markets, the company foresees revenue of 3.3 billion euros for the September quarter. The premium fees are being raised in approximately 50 countries.

Paul Vogel, CFO, Spotify, said, “The MAU number was the best number we have had in our history. Users topped over 550 million in the quarter, which is exceptional growth of 36 million versus last quarter where we exceeded our expectations by about 21 million. We concluded the quarter with a total of 220 million subscribers, which included a net addition of 10 million users. This surpassed our forecast of 70,00,000 new subscribers.”

Furthermore, he went on to say, “Our revenue in general, both advertising and premium, came pretty much in line with expectations. Our gross margin when looking at on an adjusted basis, again backing out some of the one-time charges, was right in line with expectations of 25.5%.”

Amarjit Batra, Spotify's General Manager - South Asia, Middle East and Africa, said, “India's economy at this stage is at such a great upswing. We are currently the fifth largest economy in the world and the latest prediction which came out said India will be the second largest economy by 2075 so it's really an important market. There were 8-9 players when we entered the Indian market. Cut to today, we are the most loved brand.  The future looks extremely exciting for us.”

Furthermore, he went on to say that podcasts are actually a very fast-developing market right now in India and Spotify is at a very good place here because it has been focusing on building the ecosystem in the podcast space.

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