Spotify has reported its Q2 figures, which show that premium subscribers grew by 20% year-on-year to 165 million.
The addition of seven million subscribers - at the upper end of the company’s guidance - drove double-digit growth across all regions.
Total monthly active users (MAUs) grew 22% (nine million new users) year-on-year to 365 million in the quarter, below the guidance range.
Spotify CEO and founder Daniel Ek said: “Q2 was a strong quarter for Spotify overall, with the majority of our major metrics performing better than expected. While MAU growth was softer than expected in the first half of the year, we are seeing that trendline reverse and all the leading indicators show that we are back on track. By accelerating our pace of innovation and investing for the long term, we continue to cement our standing as the preferred audio platform around the world.”
The streaming giant continues to weigh up the uncertainty around Covid-19 around the world. In some cases, marketing campaigns were paused due to the severity of the pandemic.
“Although we continue to face near-term uncertainty with respect to Covid19, we remain confident in the underlying health of our user funnel, and our existing user retention activity remains consistent with historical trends,” said Spotify in its investor letter.
On a per-user basis, global consumption levels returned to year-on-year growth in the quarter, led by gains in North America and Europe.
In Q2, Olivia Rodrigo’s album Sour set the record for the biggest streaming debut for any album on Spotify this year with over 63 million global first day streams.
Spotify’s revenue increased by 23% year-on-year (28% at constant currency) to €2.3 billion. Premium revenue grew 17% to €2.06bn (or 20% at constant currency) while ad-Supported revenue surged by 110% to €275 million (126% at constant currency).
Within premium, average revenue per user (ARPU) of €4.29 in Q2 was down 3% year-on-year (or flat at constant currency versus down 1% in Q1).
“Excluding the impact of [currency fluctuations], we saw a benefit to ARPU from our Q1 price increases along with a marginal initial impact from Q2 price increases, offset by the impact of product mix shift,” said Spotify’s letter.
For Q3, Spotify’s guidance is for 377-382m MAUs, 170-174m premium subscribers and total revenue of €2.31bn to €2.51 bn.