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Spotify reports a surge in losses even though premium subscribers grew in Q2
The company says the premium revenue grew 11% year-on-year to €2,773 million reflecting subscriber growth of 17% year-in-year, while ad-supported revenue grew 12% year-on-year reflecting double-digit growth across nearly all regions.
Spotify posted a net loss of 302 million euros wider than the year-earlier period's loss of 125 million euros despite a growth in premium subscribers. The Q2 results show revenue of 3.18 billion euros was up 11% in Q2 reflecting 11% growth in subscription revenue and 12% growth in ad revenue. The company netted 10 million new Premium customers in the quarter (over its expectations of 7 million).
It anticipates revenue of 3.3 billion euros for the September quarter given the recent price-hike in its services across markets. The company is raising premium fees in about 50 countries, including the U.K., Ireland, Australia, New Zealand, Brazil, Spain, France, Hong Kong, Israel, Italy, Mexico, the Netherlands, Sweden and Canada. In the U.S, Spotify premium will now cost $10.99.
However, it's gross Margin finished at 24.1% in Q2 reflecting "podcasting improvement, marketplace growth and other cost of revenue favorability," the company says. Operating Expenses grew 13% year-on-year driven predominantly by charges related to efficiency efforts of 91 million euros.
The platform's total MAUs grew 27% year-on-year to 551 million, up from 515 million last quarter. The company says, there is continued improvements in ad-supported retention and performance marketing efficiencies and a strong growth amongst Gen Z listeners.
For Q3, the company projects the total MAU's to reach 572 million, with an addition of approximately 21 million net new MAUs in the quarter. It also projects the addition of approximately 4 million net new subscribers in the quarter.