Music streaming company Spotify realized a revenue of $2.81 billion in its second quarter, beating analysts’ forecast of $2.75 billion. The company’s premium subscribers count in the second quarter also surpassed expectations. While analysts forecasted 170 million premium subscribers, Spotify reported an impressive number of 174 million premium subscribers.
Spotify reported an impressive quarter as paid subscribers for its premium service rose by 20 percent, driven by demand in Europe and North America, which accounted for more than half of its monthly active users (MAUs).
Spotify’s paying subscribers:
July 2021: 165 million
Feb 2020: 125 million
Mar 2019: 100 million
May 2018: 75 million
July 2017: 60 million
Sep 2016: 40 million
Jun 2015: 20 million
May 2014: 10 million
Dec 2012: 5 million
Mar 2011: 1 million
July 2010: 500,000
May 2008: 0
— Jon Erlichman (@JonErlichman) July 28, 2021
Markets in Europe and North America have gradually recovered, after being hit by the pandemic. “Some markets are now almost back to normal, some of them are still very hard hit by COVID”, CEO Daniel Ek remarked. Spotify’s total number of monthly active users rose 22 percent to 365 million but fell below analysts’ expectations of 371.5 million. Its advertisement business, which was also hit last year by the pandemic, recovered and reached $324.64million, experiencing a 110 percent growth
Earlier this year, Spotify expanded its shores to 85 other countries, among which 39 were African countries. This makes Spotify available in nearly 180 countries across Asia, Africa, Europe, North America, and Latin America. According to the company, its international expansion meant that over a billion potential new customers could now sign up, who until its expansion had no access to its services.
While Spotify started as a music streaming platform, it now allows people to listen to podcasts, audiobooks, and meditations. To edge over stiff competitors such as Apple and Amazon, Spotify launched a paid subscription platform for podcasters in the United States in April. The company has 2.9 million podcasts on its platform and the podcast share of overall consumption hours reached an all-time high in the quarter. Spotify has invested heavily to secure exclusive podcast series. Its podcasts by personalities, such as Joe Rogan and Bill Simmons, continue to draw more users.
Although Spotify shares have dropped 25 percent since the beginning of the year, with its stock falling 13 percent in the last 12 months, the Sweden-based company is likely to perform better in the next quarter, as the effects of the pandemic continue to wear off.