Music and podcast streaming platform Spotify has shared its Q2 2023 financial summary. From the earnings report seen by Technext, the company added 10 million subscribers, 36 million new monthly active users (MAUs), and grew its revenue by 17.7% (€3.2 billion).
Spotify noted in the document that it expected to spend more as part of efforts to “become a more efficient and stronger business.” While it was estimated to gain 530 million MAUs in Q2, the company secured 551, representing an increase of 27%.
Similarly, its subscriber base for Q2 was 220 million, 3 million higher than the estimate. Interestingly, this is the company’s best Q2 performance in terms of MAU and subscriber growth. In Q2 of last year, it amassed 433 million MAUs and 188 million subscribers. This quarter’s figures showed steady growth.
Although Spotify’s revenue generation for Q2 did not exceed expectations, the £3.2 billion it gained is pretty impressive. The revenue grew 11% year-on-year (YOY).
Meanwhile, its gross margin for Q2 was 24.1% thanks to the net charges of €44 million. These net charges stemmed from the closure of many podcast shows and excess real estate. It recorded an operating loss of €247 million which was primarily caused by the same reasons given for the gross margin figure.
Following an impressive Q2 outing, Spotify shared its estimates for the next quarter. It notes in the document that the figures are subject to “substantial uncertainty.” It foresees the addition of 21 million MAUs to drive the total number to 572 million. For premium subscribers, it hopes to onboard 4 million new users which will bring the subscriber base to 224 million.
Moving on to revenue, it expects to record €3.3 billion. It foresees a gross margin of 26% mainly caused by YOY gain in podcasting and other Cost of Revenue. It also predicts an operation loss of €45 million.
Yesterday, Technext reported that Spotify raised the price for premium subscribers by $1, raising concerns about whether other markets including Africa were next. As it strives to do better next quarter, it’s worth asking whether potential price hikes can impact its revenue generation.
Read also: Spotify to unveil Supremium, its highest subscription yet, offering high-fidelity audio
Other strides Spotify made in Q2 of 2023
Beyond adding new subscribers and growing its revenue, Spotify also recorded some other achievements worth mentioning. As part of its efforts to create the world’s premier audio market, the platform launched an AI-driven DJ feature for customers in the UK and Ireland. Interestingly, this was the most sought-after feature from users in that region.
It also gave the desktop mode a makeover as the Your Library and Now Playing sections now offer a better feel and connect users quicker to their favourite songs and podcasts. To further personalize the user experience, Spotify also increased the number of languages on the mobile application to 74. Brands across the world can also now leverage the platform’s new Ad Analytics product.
Last month, Spotify introduced a site called Afrobeats: Journey of a Billion Streams to document the Afrobeats music genre and its impact on the African continent and beyond. The platform will also offer Afrobeats-focused playlists and podcasts to enable users to stay updated with trends and further understand the fast-growing genre.