Spotify Reports Q3 2021 Earnings Results

27 October 2021 - Press release

SPOTIFY REPORTS STRONG Q3 2021 RESULTS, OUTPERFORMING ON NEARLY ALL MAJOR METRICS

Spotify CEO and founder, Daniel Ek, says: “We had a very strong quarter. The business is doing really well and I’m pleased that we continue to deliver across the areas that are fundamental to our growth and long term strategy. Audio is our right to win. While we have been relentless in our pursuit of being the world’s largest audio platform, it’s still early days and we are just getting started.”

Q3 Highlights:

• MAUs, Revenue, Gross Margin and Operating Income performed better than expected.

• Subscriber growth was inline, ARPU growth increased Y/Y, and our advertising business had its best quarter ever and continues to accelerate. 

Q3 by the Numbers:

• Premium Subscribers grew 19% Y/Y to 172 million in the quarter and towards the midpoint of our guidance range.

• MAUs grew 19% Y/Y to 381 million in the quarter and near the top end of our guidance range. We saw improved momentum across the 86 markets launched earlier this year, with outperformance led by South Korea, Bangladesh, and Pakistan.

• Revenue grew 27% Y/Y to €2,501 million and was at the top end of our guidance range due to significant strength in advertising revenue, which meaningfully outperformed, growing 75% Y/Y to €323 million.

• Gross Margin finished at 26.7%, above the top end of our guidance range and reflecting nearly 200 bps of Y/Y expansion. 

• ARPU of €4.34 was up 4% Y/Y (or up 3% Y/Y constant currency vs. flat Y/Y in Q2). Excluding the impact of FX, we saw a benefit to ARPU primarily from our price increases. 

• Podcast MAU continued to increase, accelerating relative to Q2 trends. Among MAUs that engaged with podcasts in Q3, consumption trends remained strong (up 20% Y/Y on a per user basis) while month-over-month retention rates continued to trend positively. Podcast share of overall consumption hours on our platform also reached an all-time high during the quarter.

Guidance:We have maintained our prior Q4 guidance Total MAUs, Total Premium Subscribers, and Operating Profit/Loss, and have increased the bottom end of the range for Total Revenue and Gross Margin.