Spotify Reaches Milestone For Premium Subscribers

Spotify Technology reached 300 million premium subscribers in the second quarter and grew revenue 14% year over year, while swinging to a substantial profit.

The company added seven million premium subscribers in the period, beating its prior guidance by one million. Growth came from every region, including North America, Latin America, Europe and the rest of the world. 

Monthly active users rose 12% to 777 million after the addition of 16 million users, falling one million short of guidance.

Net income reached €545 million (about $627 million), or €2.61 per share, compared with a loss of €86 million a year earlier. Revenue totaled approximately €4.78 billion, up from €4.19 billion. Gross margin hit a record 33.4%.

For the current quarter, Spotify forecast monthly active users of 788 million (an increase of about 11 million) and premium subscribers of 305 million (an increase of roughly five million). It projected revenue of €5 billion and a gross margin of 32.9%.

Spotify continues to expand its music, podcast and audiobook offerings. It recently introduced Reserved, which holds two concert tickets for select artists’ biggest fans ahead of general sale. The company is also rolling out personal podcasts that generate AI audio episodes based on listeners’ interests and developing an AI tool that lets users create remixes and cover songs inside the app.

Shares of Spotify fell over 5% in pre-market trading on Tuesday after a weaker-than-expected forecast overshadowed the company’s milestone of 300 million premium subscribers globally.