Swedish Music-streaming company, Spotify have released its second-quarter (Q2) earnings report. The report revealed that the company gained 8 million paid subscribers during the quarter, growing its paid subscribers to 108 million, that is 30.1% YoY (year-over-year). Totaling the company’s monthly active users at 232 million, which is at 29% YoY.
The report also revealed that the subscriber’s growth is boosting Spotify’s revenue growth. Therefore, considering that 90.1% revenue for Q2 came from paid subscribers, slightly lower than the 91.7% made from paid subscribers in the first quarter.
According to the report, Spotify generated $1.85 billion in revenue for the second quarter. The company’s revenue increased by 31.0% same quarter in 2018. The report revealed that Spotify’s growth was due to the company’s growth of paid subscribers. The company attributed the growth to product innovation.
Although the company recorded a loss of $99.9 million in Q2 2018, Spotify shrunk the loss to just $3.4 million in Q2 2019. The company also grew its gross margin from 24.7% and 25.8% in Q1 and Q2 2018 to 26% in Q2 2019.
The company generated 34% ad revenue at $183 million in Q2 2019. The Ad segment of Spotify is responsible for generating over 10% of the company’s overall revenue. The company revealed through the report that audio ads remain its fastest-growing product for the third quarter in a row. As its audio ad revenue rose to 38% YoY in Q2. Its ad revenue rose to71% YoY, representing around 30% of Spotify’s overall ad revenue.
Spotify recorded a churn rate of 4.6% in Q2 2019. This is due to its discounted subscription offerings. The company’s average revenue per user fell to 1% YoY at $5.42 per user.
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