Spotify Reports 165 Million Paid Users as Q2 Revenue Climbs 23%

The closely-watched average revenue per user (ARPU) metric for premium subscribers was down 3% y/y to 4.29 euros ($5), which the company said was aided by price increases in both Q1 and Q2. Average monthly churn for premium subscriptions was down 23 bps y/y, aided by higher retention-focused efforts like family plans.

Gross margin, the remainder after royalties and other content associated, was 28.4% of total revenue compared to 25.5% in Q1. The company said the improvement was driven by the release of accruals for earlier royalty estimates and aided by a revenue shift towards podcasts across the platform.

Spotify reported operating profit of 12 million euros, down slightly from 14 million in Q1. Operating expenses totaled 651 million euros ($768 million) for the quarter. Spotify currently has 7,085 full time employees globally, up from 6,049 a year ago.

Spotify said that its business has more than 3.1 billion euros ($3.6 billion) in liquidity and that its free cash flow for the quarter was 34 million euros ($40 million).

Financial metrics (Q2 2021 vs. Q2 2020)

  • Revenue: €2.331 billion up 23% from €1.89 billion
  • Gross margin: 28.4% vs. 25.4%
  • Operating profit (loss): €12 million vs -€167 million
  • Free cash flow: €34 million vs €27 million

Listener metrics

  • Subscribers: 165 million up 20% from 138 million
  • Ad-supported listeners: 210 million up 24% from 170 million
  • Total listeners: 365 million up 22% from 299 million

Q3 guidance

  • Q3 2021 Revenue: €2.31 billion to €2.51 billion
  • Q3 2021 Subscribers: 170 million to 174 million
  • Q3 2021 MAUs: 377 to 382 million

This article will be updated.

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