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Spotify shows market expansion and subscription boost in thriving third-quarter

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Spotify has been among scores of tech firms to lay off staff this year - but one venture capital investor says there has been some unexpected positive consequences.
Spotify has been among scores of tech firms to lay off staff this year - but one venture capital investor says there has been some unexpected positive consequences.

Spotify reports a strong third-quarter, with nearly all of their major metrics finishing better than expected.

Their revenue of €2.5bn (£2.1bn) grew 27 per cent year-on-year in Q3, with premium revenue up 22 per cent to €2.2bn (£1.9bn).

The streaming giant showed significant advertising strength, with Ad-Supported revenue growing 75 per cent to €323 million (£273m).

Crucially, subscriber growth was inline with expectations and total MAUs grew 19 per cent year-on-year to 381 million in the quarter, up from 365 million last quarter.

They experienced double digit growth in all regions with particular strength in Rest of World where performance was aided by the resumption of marketing activity in India along with above-plan growth in the Philippines and Indonesia. 

They also saw improved momentum across the 86 markets launched earlier this year, with outperformance led by South Korea, Bangladesh, and Pakistan.

Premium Subscribers grew 19 per cent year-on-year to 172m in the quarter, up from 165 million last quarter and towards the midpoint of the guidance range. 

The average monthly Premium churn rate for the quarter was down sequentially and up year-on-year against last year’s historic low. They continue to expect the full year 2021 churn to be down versus 2020.

This quarter they added several major promotional partnerships, including HMD Global, LG U+, OnePlus, PayMaya, and Tinkoff.