Daniel Ek, chief executive officer and co-founder of Spotify AB, stands for a photograph after a news conference in Tokyo, Japan, on Thursday, Sept. 29, 2016.
Akio Kon | Bloomberg | Getty Images
Spotify shares popped more than 14% on Wednesday after the company reported second-quarter 2022 earnings that beat analyst expectations on revenue and showed continued subscriber growth.
Here’s how the company did:
- Earnings per share: A loss of 85 euro cents per share vs. an estimated loss of 63 euro cents per share as expected by analysts, according to Refinitiv
- Revenue: 2.86 billion euros vs. 2.81 billion expected by analysts, according to Refinitiv
Spotify has continued to invest in its advertising, and ad-supported revenue grew 31% year-over-year to 360 million euros, reaching an all-time high of 13% of the total revenue for the quarter.
Despite the closure of its Russian operations, Spotify reported 433 million monthly active users in its second quarter, up 19% year-over-year and 5 million above guidance. The company said this growth can be attributed to successful marketing campaigns, Gen Z strength in Latin America and account reactivations in Europe.
Paid subscriber growth also beat guidance by a million users, growing 14% year-over-year to 188 million.
“We’re seeing several markets trending ahead of our forecasts,” Spotify CEO Daniel Ek said on the company’s earnings call, reiterating plans to proactively reduce headcount by 25%. “I’ve said this before, I do believe only the paranoid survive, and we’re preparing as if things could get worse, but it’s hardly be anything but optimistic given what I’m currently seeing.”
Spotify expects to add approximately 17 million new monthly active users in the third quarter, bringing its total to 450 million, the company said. It expects to post 194 million paid subscribers in the quarter, implying an increase of 6 million. The company anticipates its revenue to increase to 3 billion euros.
“We continue to monitor the global macro outlook, but to date, have seen no real impact on our user or subscriber outlook,” CFO Paul Vogel said on the call. “Specifically, we expect to see another quarter of accelerating MAU net adds and expect subscriber net additions similar to Q3 of last year.