Spotify Subscriber Gains Beat Expectations, Driving Double-Digit Revenue Growth in Q3
"This was a quarter where we did what we said," said Spotify Co-CEO Alex Norström.
Spotify reported a 14% increase in total revenue to €4.97 billion ($5.63 billion) in the third quarter, driven by a 9% rise in ad-supported revenue to €482 million ($546 million) and double-digit growth in net new subscribers. The streaming service added 6 million net new premium subscribers, exceeding expectations by 1 million, bringing the total to 306 million users worldwide.
This growth in paying users resulted in a 15% increase in revenue from paying users to €4.5 billion ($5.08 billion) compared to the previous year. Monthly active users (MAUs) also grew by 11% year-over-year to 788 million. Operating income rose 12% year-over-year to €672 million, with gross margin expanding by 136 basis points to 33%.
Despite operating expenses increasing by 26% to €967 million ($1.1 billion), the gross margin improvement and growth in revenue helped offset the higher costs.
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