Spotify hits subscriber targets as net loss doubles

Daniel Ek SpotifySpotify has seen its user numbers continue to surge, despite the threat of Apple Music, with its monthly active users (MAUs) and its premium subscribers seeing strong year-over-year (YoY) growth.

According to the music streaming service’s second quarter earnings report, MAUs grew by 30 per cent YoY to 180m with growth in developing markets within Latin America and the rest of the world outpacing more established markets. Of these MAUs, 101m were ad-supported users, a growth of 23 per cent from Q2 2017.

Premium subscribers were up 40 per cent YoY to 83m with the company’s family plan attracting users and successfully keeping them around. This is slightly ahead of the 82m that was expected by analysts for the period.

Financially, revenue for the quarter totalled €1,273m – up 26 per cent from the same period last year. Despite this, Spotify continued to be a loss-making company with operating expenses of €419m and a total operating loss more than doubling to €90m quarter-over-quarter (QoQ) from €41m in Q1 2018.

The company reported average revenue per user (ARPU) of €4.89, down 12 per cent YoY and up four per QoQ. Spotify accounts the YoY decline in ARPU to a growth in family and student plans, as well the rapid growth in lower ARPU regions like Latin America and Southeast Asia.

Looking ahead, Spotify is expecting MAUs to grow between 25 and 29 per cent in Q3 2018, meaning a user base of in the region of 188m and 193m. This is forecast to include between 85m and 88m premium subscribers at growth ranging from 36 per cent to 43 per cent.

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