Spotify has introduced its Q3 2019 monetary and person metrics, revealing that it grew its whole month-to-month energetic customers (MAUs) to 248 million — up 30% on the 191 million it reported for a similar interval final 12 months, and up 7% on the 232 million from the earlier quarter.
The music-streaming large is sustaining a roughly 45% ratio of premium to ad-supported subscribers, claiming 113 million paying customers for the previous quarter, up 31% from 87 million within the Q3 2018 interval — and marginally surpassing the high-end analyst estimates.
Spotify attributed a few of its internet premium subscriber progress to the “robust efficiency” of its pupil and household plans, the latter of which acquired some notable upgrades previously few months. Again in August, for instance, Spotify launched new content material filters that permit dad and mom to manage what songs their kids can entry, along with a brand new family-focused playlist.
When it comes to financials, Spotify reported income of €1.7 billion ($1.9 billion), up 28% year-on-year (YoY) and 4% quarter-on-quarter (QoQ). The corporate additionally turned an working revenue of €54 million ($60 million), in comparison with a small YoY and QoQ loss on the earlier figures — this was pushed partly by a better gross revenue and a “lower-than-expected” spend throughout areas together with artist advertising and marketing, unique content material promotion, and R&D. Nevertheless, Spotify anticipates returning to a loss for This autumn 2019, estimating that its working loss will fall someplace between €31 million and €131 million ($34 million – $145 million).
Spotify additionally used its Q3 earnings report back to announce that chief monetary officer (CFO) Barry McCarthy will likely be leaving the corporate in January after almost 5 years, with Paul Vogel — present head of FP&A, treasury, and investor relations — taking on.
Although Spotify’s backside line is in fact an necessary issue for Wall Road, it’s the corporate’s longer-term prospects referring to its person numbers which might be of explicit word, particularly in relation to the competitors. Again in June, Apple introduced that Apple Music had 60 million customers, a determine that has doubtless elevated a bit within the subsequent 4 months. However globally, Spotify continues to dominate each by way of general person numbers and people on a paid plan.
“Relative to Apple, the publicly out there knowledge reveals that we’re including roughly twice as many subscribers per 30 days as they’re,” Spotify mentioned in its report. “Moreover, we consider that our month-to-month engagement is roughly 2 occasions as excessive and our churn is at half the speed.”
Regardless of previous criticism over Spotify’s continued adoption of a free streaming plan, the plan stays an necessary device for the corporate, permitting it to lure new customers on board so it may possibly persuade them to improve to a paid tier. Premium subscriptions proceed to be the primary income driver for Spotify, representing greater than 90% of its revenue in Q3.
“We rolled out quite a lot of checks in Q3 with the aim of immersing new customers within the product performance quicker,” the corporate mentioned. “It’s nonetheless early, however we’re inspired by the enhancements we’ve seen in retention up to now. Our perception is that a greater onboarding expertise results in elevated engagement, which results in higher retention, conversion, satisfaction, and in the end, lifetime worth.”
Lastly, a rising a part of Spotify’s retention plans embrace podcasting, which it has invested closely in over the previous 12 months. As such, Spotify broke out podcast-specific numbers for its Q3 financials, revealing that 14% of its customers listened to a podcast over the last quarter, which equates to roughly 35 million folks.