Digital streaming platform, Spotify, has posted a ‘record high’ quarterly profit.
In Q2, the platform saw its global Premium Subscriber base grow to 246 million paying users – and posted its biggest-ever quarterly profit in the three months to the end of June.
According to Spotify’s latest financial results (for Q2 2024), filed today (July 23), the company reported that its Premium Subscriber base was up 12% YoY, and up by 7 million net subscribers on the 239 million that it counted at the end of the prior quarter (Q1 2024).
SPOT’s subscriber net additions of 7 million were 1 million ahead of guidance. “Our business continued to perform well in Q2, led by healthy subscriber gains, improved monetization and record profitability,” said Spotify in its investor presentation. “Although, we did see another quarter of MAU variability, funnel conversion remained strong, particularly in developed markets where we recently adjusted pricing.”
Spotify’s total number of Monthly Active Users, which combine paying users and ad-supported users, grew 14% YoY to 626 million. That was up 11 million MAUs from the 615 million reported for the prior quarter (Q1 2024), but below guidance by 5 million (Spotify forecast that it would reach 631 million MAUs in Q2).
In terms of finances, in Q2, Spotify’s Premium/subscriber revenues grew 22% YoY at constant currency to €3.351 billion ($3.608bn), driven by the platform’s subscriber growth and a Premium ARPU increase of 10% YoY at constant currency to €4.62 ($4.97).
Spotify noted in its investor presentation that “excluding the impact of FX, ARPU performance was driven by price increase benefits, partially offset by product/market mix”.
Spotify’s Ad-Supported Revenue in Q2 2024 was €456 million ($490.97), up 12% YoY at constant currency, reflecting double-digit Y/Y growth across all regions. The platform generated €3.807 billion ($4.098bn) in total quarterly revenue (including Premium and ad-supported), which was up 21% YoY at constant currency.
The company’s Gross Margin finished at 29.2% in Q2, up from 24.1% in Q2 2023. In terms of profitability, Spotify posted a “record high” operating income of €266 million (USD $286.402m) in Q2, which, according to SPOT, reflected “lower personnel and related costs and lower marketing spend”.
Spotify CEO, Daniel Ek, said: “It’s an exciting time at Spotify. We keep on innovating and showing that we aren’t just a great product, but increasingly also a great business. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”