Spotify has presented its annual report for the third quarter of the current year and surprised analysts and investors. They had expected a loss and not earnings per share.
The increase in profits comes from the increase in premium customers, mainly from Southeast Asia and Latin America. But increases in student and family accounts also have their share in the development.
Spotify was able to acquire around 31 percent new payers and increase the number of users from 87 million to 113 million customers. At the same time, sales with premium customers increased to around 1.5 billion euros.
Spotify only achieved around 170 million euros through its advertising-financed service. Here the streaming service grew from 109 million to 141 million users. This means that Spotify has a share of 45 percent of paying customers, who are responsible for over 90 percent of sales.
Spotify: User numbers are growing twice as fast as Apple Music
The streaming market leader can refer to 248 active users for the key figure of “monthly active users” (MAU), which is important for assessing digital services. This is also a significant increase compared to the 191 million MAU in the same quarter of the previous year.
Compared to the direct follower Apple Music with its around 60 million customers, Spotify points to a twice as fast user growth, as well as a much higher activity of its own users. Amazon Music also sees the company lagging behind, which is mainly due to the fact that there is a much less favorable relationship between paying and advertising-financed customers.
The company’s podcasting strategy is also showing initial success. With around 500,000 podcast titles, Spotify already offers a noteworthy offering, which, according to the company, is already used by around 30 million MAUs.
All of this causes the streaming service to raise its own forecasts. 270 million people are expected to use Spotify by the end of the year. The number of premium customers is expected to grow by another ten million.
The good news led to an eight percent rise in Spotify shares.