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.
See also: Gartner Inc. Report reveals Global Smartphone Sales Will Decline in 2019
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.
More on TechGist Africa:
- Lagos-based GONA Secures an Undisclosed Funding in Pre-A Round for Expansion
- Egypt’s MoneyFellows Secures $1 Million Funding, set to Digitize Money Circles Across Borders
- BRCK & Swvl Partners to roll-out Free Wi-Fi for Kenyan ride-hail buses
- On-demand Ride-Hailing Startup Gozem to Launch Digital wallet and Delivery Services
- See Sparkle, Uzoma Dozie’s Latest Fintech Discovery