Even with an increase in subscribers, Spotify has huge losses

This Wednesday (27) the service of streaming of songs Spotify released its financial report. The results refer to the second quarter of 2022. The platform was able to increase your Premium subscriber base. Even so, he suffered a huge loss of 125 million euros!

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Number of active users is impressive

Spotify surprised shareholders and even directors when it comes to the number of active users. Compared to the same period last year, the platform gained 19% more subscribers.

With that, the second quarter of 2022 ended with the platform having 433 million monthly active users. That number even surpassed the company’s forecasts, which had hoped to reach 428 million monthly active users.

As the company itself mentioned on its website, the increase in the number of users was due to a few reasons. The first of these was by successful marketing campaigns all over the world. In Europe they got several reactivations. And in Latin America, Generation Z played an important role in boosting the use of Spotify.

The platform also released the number of users by modality (Premium and Free). Premium users, that is, those who pay a monthly fee to Spotify, added 188 million in the second quarter of 2022. This represents a 14% increase over the same period last year. already the free users totaled 256 millionan increase of 22%.

Despite growth, Spotify suffers losses

But not everything is perfect. It is obvious that the increase in the number of users also increased the company’s revenue. But not enough to avoid a net loss of 125 million euros.

Spotify

Premium users were responsible for increasing Spotify’s revenue by 22% year-on-year. That is, they took to Spotify’s cashier a total of 2.5 billion euros. The free users, in turn, brought a recipe for 360 million euros. This represents a 31% increase from Q2 2021.

Spotify’s total revenue for the period was 2.8 billion. In the annual comparison, the result represents an increase of 23%. In the second quarter of 2021, the company earned 2.3 billion euros. However, as the platform costs are very high, the company was unable to end the quarter in the black.

Expectations for the next quarter

The company’s expectation for the next three months is also one of continuous growth. By the end of September, the streaming service expects to have 450 million monthly active users. The goal is for the number of subscribers to rise to 194 million and revenue finally to reach €3 billion.

Spotify

However, Spotify said nothing about new features for the platform. One of the most anticipated is the HiFi plan. Officially announced more than 1 year ago, so far the plan with higher quality songs has not come to fruition. On the other hand, direct competitors such as apple Music, Deezer and Tidal already have high quality tracks for subscribers.

Anyway, it’s wait and see. I, in particular, find it amazing how Spotify is still standing and leading the segment despite causing so much damage. Companies like Apple and Google I even understand, since they have sources of income on other fronts. But Spotify I think is amazing.

Is that you? Which music streaming platform do you use?

Source: Spotify Newsroom

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