Spotify (SPOT) Q2 2022 Earnings

Daniel Eck, chief executive officer and co-founder of Spotify AB, poses for a photo after a press conference in Tokyo, Japan, Thursday, September 29, 2016.

Akio Kon | Bloomberg | Getty Images

Spotify shares jumped more than 14% on Wednesday after the company reported second-quarter 2022 earnings that beat analysts’ revenue expectations and showed continued subscriber growth.

Here’s how the company did it:

  • Earnings per share: A loss of 85 euro cents per share versus an estimated loss of 63 euro cents per share, as expected by analysts, according to Refinitiv.
  • income: 2.86 billion euros, versus the 2.81 billion expected by analysts, according to Refinitiv

Spotify continued to invest in its advertising, with ad revenue up 31% year-on-year to €360 million, reaching an all-time high of 13% of total revenue for the quarter.

Despite the shutdown of its Russian operations, Spotify reported 433 million monthly active users in the second quarter, up 19% year over year and 5 million above forecasts. The company said this growth can be attributed to successful marketing campaigns, Gen Z strength in Latin America and reactivation of accounts in Europe.

Paid subscriber growth also surpassed the target of one million users, up 14% year over year to 188 million.

“We’re seeing trends in some markets that are ahead of our forecasts,” Spotify CEO Daniel Ek said on the company’s earnings call, reiterating plans to aggressively cut 25% of its workforce. “I’ve said it before, I believe only the paranoid survive and we’re preparing for things to get worse, but it’s unlikely to be anything other than optimistic given what I’m seeing right now.”

Spotify expects to add about 17 million new monthly active users in the third quarter, bringing its total to 450 million, the company said. It is expected to have 194 million paid subscribers in the quarter, an increase of 6 million. The company predicts that revenue will grow to 3 billion euros.

“We continue to monitor the global macro outlook, but to date have not seen any real impact on our user or subscriber outlook,” CFO Paul Vogel said on the call. “Specifically, we expect another quarter of acceleration in net MAU additions and expect subscriber growth to be similar to last year’s third quarter.

Spotify (SPOT) Q2 2022 Earnings

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