Music streaming giant Spotify ended the second quarter of 2022 with 188 million premium, or paying, subscribers, up from 182 million as of the end of the first quarter, exceeding its own forecast.
The company said the result came in “above our guidance, aided by promotional intake and household plans.”
Spotify also said on Wednesday that it hit better-than-expected 433 million monthly active users (MAUs) as of the end of June, up from 422 million as of the end of March. “Net additions of 19 million represented our largest ever second-quarter growth,” the firm said, citing such factors as reactivations in Europe and what it described as “Gen Z strength in Latin America.”
The company, led by CEO Daniel Ek, had previously forecast it would end the quarter through June with 187 million paying subscribers, assuming “additional 600,000 disconnects from full closure of Russian operations in April,” and 428 million monthly active users, reflecting “a loss from the closure of Russian operations.” The guidance marked a switch to providing single estimates for key metrics instead of the forecast ranges that it had previously shared with investors and Wall Street analysts.
Second-quarter advertising revenue at the Stockholm-based company continued to grow despite slowing ad momentum at some digital giants amid fears of a recession. Spotify’s quarterly ad haul jumped 31 percent to €360 million ($365 million), “reaching an all-time high as a percent of total revenue at 13 percent.”
Advertising growth drove a total second-quarter revenue gain of 23 percent to €2.86 billion ($2.90 billion). Spotify reported a quarterly operating loss of €194 million ($197 million) and a net loss of €125 million ($127 million).
The music streamer’s podcast business also continued to expand. At the end of June, Spotify had 4.4 million podcasts on the platform, up from 4.0 million at the end of March. Podcast revenue grew in the “strong double-digit range” over the year-ago period, the company said. “We released 100 new original and exclusive podcasts globally in the second quarter, with Batman Unburied hitting #1 in several key markets. Additionally, video podcasts are now available to creators via Anchor in 11 markets.”
Spotify’s stock rose more than 3 percent in pre-market trading on Wednesday.