Dear Shareholders,

The business performed very well in the quarter. Nearly all of our major metrics finished better than expected, including MAUs, Revenue, Gross Margin, and Operating Income. Subscriber growth was inline and importantly, ARPU growth increased Y/Y. Additionally, we saw another quarter of significant advertising strength and user engagement metrics across many markets showed encouraging signs of growth. During the quarter, we generated positive Free Cash Flow of €99 million.


Total MAUs grew 19% Y/Y to 381 million in the quarter, up from 365 million last quarter and near the top end of our guidance range. We experienced double digit Y/Y growth in all regions with particular strength in Rest of World where performance was aided by the resumption of marketing activity in India along with above-plan growth in the Philippines and Indonesia. We also saw improved momentum across the 86 markets launched earlier this year, with outperformance led by South Korea, Bangladesh, and Pakistan.


Our Premium Subscribers grew 19% Y/Y to 172 million in the quarter, up from 165 million last quarter and towards the midpoint of the guidance range. We tested a Premium promotion in the third quarter, which aided the typical seasonality of our business and also helped offset the tough comp from the successful launch of Russia and surrounding territories in Q3 last year.

This quarter we added several major promotional partnerships, including HMD Global (Spotify preloads on select Nokia branded smartphones and tablets across all 178 markets), LG U+ (offering 3 or 6 month trials in South Korea with one of the country’s largest telcos), OnePlus (Spotify preloads on OnePlus mobile devices in India with 3 or 6 month trials and a limited offer of 12 month trials to OnePlus Red Cable Club members), PayMaya (supporting pre-paid payment solutions for Spotify's daily, weekly and monthly subscriptions and offering 7 day trials in the Philippines), and Tinkoff (offering 3 month trials with Russia’s largest all-digital bank). Additionally, we renewed our partnership with Spark, New Zealand’s largest telco and digital services company, offering bundling and reseller opportunities.

Our average monthly Premium churn rate for the quarter was down sequentially and up Y/Y against last year’s historic low. We are pleased with the trends in churn and continue to expect full year 2021 churn to be down versus 2020.



Revenue of €2,501 million grew 27% Y/Y in Q3 (or 26% Y/Y on a constant currency basis) and was at the top end of our guidance range due to significant strength in advertising. Premium Revenue grew 22% Y/Y to €2,178 million (or 21% Y/Y constant currency) while Ad-Supported Revenue was particularly strong, growing 75% Y/Y to €323 million (or 75% Y/Y constant currency).

Within Premium, average revenue per user (“ARPU”) of €4.34 in Q3 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.

Ad-Supported Revenue meaningfully outperformed, driven by higher sold impressions, increased CPMs, and accelerated demand within the Spotify Audience Network. The strength in advertising was broad-based across all sales channels, with the United States and United Kingdom meaningfully exceeding expectations. Our music business was driven by growth in impressions, a meaningful improvement in sell-through rate, and double-digit CPM growth. Our Podcast business was driven by strong double-digit Y/Y growth at existing Spotify studios (The Ringer, Parcast, Spotify Studios, and Gimlet) along with the Megaphone acquisition and the exclusive licensing of the Joe Rogan Experience, Armchair Expert with Dax Shephard, and Call Her Daddy.

During Q3, the Spotify Audience Network continued to gain traction in the United States while expanding into the United Kingdom, Canada, and Australia. The Spotify Audience Network continued to outperform in the quarter, driven by higher available inventory and incremental revenue from international sales. Since launch, the number of podcasts in our network has grown by more than 50%, and nearly 1 in 5 Spotify advertisers are already participating. The Spotify Audience Network will open to top emerging podcast creators from Anchor in the coming weeks, increasing the scale and reach for our advertisers.

Gross Margin

Gross Margin finished at 26.7% in Q3, above the top end of our guidance range and reflecting nearly 200 bps of Y/Y expansion. The Gross Margin improvement reflected a favorable revenue mix shift towards podcasts, marketplace activity, improved music advertising operating leverage, and Other Cost of Revenue efficiencies (e.g. payment fees, streaming delivery costs), which were partially offset by higher non-music and other content costs and publishing rate increases.

Premium Gross Margin was 29.1% in Q3, up 182 bps Y/Y, and Ad-Supported Gross Margin was 10.5% in Q3, up 993 bps Y/Y. As a reminder, all content costs related to podcast investment are included in the Ad-Supported business for the current and historical periods.

Operating Expenses

Operating Expenses totaled €593 million in Q3, an increase of 12% Y/Y. Social Charges were below forecast given the decline in our share price during the quarter. Additionally, personnel costs came in lower than expected as well as certain marketing expenses. Excluding the impact of Social Charge movements, Operating Expenses were better than forecast and contributed to positive Operating Income in the quarter.

As a reminder, Social Charges are payroll taxes associated with employee salaries and benefits, including share-based compensation. We are subject to social taxes in several countries in which we operate, although Sweden accounts for the bulk of the social costs. We don’t forecast stock price changes in our guidance so upward or downward movements will impact our reported operating expenses.

At the end of Q3, our workforce consisted of 7,431 FTEs globally.

Product and Platform

During the quarter, we continued to lean into the personalization of our user experiences to help drive improved intake, retention, conversion, and LTV. Key product rollouts included: Blend (the ability for two users to merge their music into one shared playlist), Enhance (the ability for Premium users to add personalized recommendations to their playlists), Episodes for You (episodic podcast level recommendations), and What’s New (a feed that gathers all new releases from the artists and shows that users follow).

In late August, we opened up our paid podcast subscriptions to all US creators with intentions to expand internationally to both more creators and users. Additionally, we announced the launch of Q&A and polls for Anchor creators, which allows listeners to respond to short questions posed by show creators. We also expanded the rollout of the Music + Talk format to 15 new markets, bringing this format to 21 markets around the world.

During the quarter, we advanced our product ubiquity efforts in several areas. We announced a partnership with Delta Airlines that allows passengers to discover Spotify-curated music and podcasts within Delta’s in-flight entertainment system. Additionally, we deepened our partnership with Roku, launching a pre-loaded playback stack, Spotify Connect discoverability, video podcast playback, and support for Roku’s voice assistant. In August, Spotify launched a new smartwatch experience supporting offline and direct streaming on Google’s new Wear OS 3 platform (deployed with key brands such as Samsung, Fossil, and Mobvoi).

Within Two-Sided Marketplace, we continued to test Discovery Mode with record labels and distributors, where we saw Q/Q growth in customers and Gross Profit contribution. Sponsored Recommendations (i.e. Marquee) also continued to gain traction during the third quarter as we expanded into more international markets including France, Monaco, Switzerland, Germany, Austria, and Liechtenstein.


At the end of Q3, we had 3.2 million podcasts on the platform (up from 2.9 million at the end of Q2). The percentage of MAUs that engaged with podcast content continued to increase throughout the quarter, marking an acceleration 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. During the quarter, podcast share of overall consumption hours on our platform also reached an all-time high.

In the United States, we released 32 new Originals & Exclusives (“O&E”) in the quarter, including the exclusivity launches of Armchair Expert with Dax Sheppard and Call Her Daddy in July. We also announced a multi-year audio content partnership between The Ringer and WWE to develop original and exclusive audio content, as well as live audio discussions hosted on Spotify Greenroom after every big WWE pay-per-view event.

Internationally, we released 76 new O&E podcasts, with notable traction in India and Latin America where Originals have been helpful in stimulating new user acquisition. Top performing shows in these markets include: Mythpat (India), Mano a Mano (Brazil), Paciente 63 (Caso 63 adaptation in Brazil), and Virus 2062 (Caso 63 adaptation in India). In Sweden, we announced seven new Spotify Originals from some of the most popular artists and talents in the country, including Spotify’s first Swedish podcast with video, Bakom micken med Filip Dikmen.

During the quarter, our music slate also saw significant new release activity. In late August, Kanye West’s 10th studio album, Donda, arrived, with 16 tracks from the album occupying the top 25 of the Spotify Global Top 50 daily chart and the entire top 10 of the Spotify US Top 50. Drake also released his highly anticipated 6th studio album Certified Lover Boy, breaking the record for the most-streamed album in a day in Spotify history with over 150 million streams. Spotify launched a global partnership with Drake including an offer for fans and new users to stream the album free on-demand for the first two weeks of release. Billie Eilish released a long-anticipated album, Happier Than Ever, in late July which included Spotify’s first-ever artist hub with Happier Than Ever: The Destination. The Destination features three enhanced albums with exclusive video and audio content from Billie across the three playlists: Billie Mode, Lyric Mode, and Fan Mode. Other major releases in the quarter included J Balvin’s album, JOSE, Kacey Musgraves’ album, star-crossed,Lil Nas X’s album, Montero,and NCT 127’s album,Sticker.

Free Cash Flow

Free Cash Flow was €99 million in Q3, a €4 million decrease Y/Y primarily due to an increase in net income adjusted for non-cash items, partially offset by higher working capital needs arising from higher ad receivables, podcast-related payments, and licensor payments. Capital expenditures decreased €8 million Y/Y largely due to finalization of various office build outs in New York City, Singapore, and LA.

At the end of Q3, we maintained a strong liquidity position with €3.3 billion in cash and cash equivalents, restricted cash, and short term investments.


The following forward-looking statements reflect Spotify’s expectations as of October 27, 2021 and are subject to substantial uncertainty. The estimates below utilize the same methodology we’ve used in prior quarters with respect to our guidance and the potential range of outcomes. Given the extraordinary operating circumstances we currently face with respect to the impact of COVID-19, there is a greater likelihood of variances with respect to those ranges than typical quarters.

Q4 2021 Guidance: We have maintained our prior Q4 guidance for Total MAUs, Total Premium Subscribers, and Operating Profit/Loss, and have increased the bottom end of the range for Total Revenue and Gross Margin.

  • ● Total MAUs: 400-407 million
  • ● Total Premium Subscribers: 177-181 million
  • ● Total Revenue: €2.54-€2.68 billion
    • Assumes approximately 250 bps tailwind to growth Y/Y due to movements in foreign exchange rates
  • ● Gross Margin: 25.1-26.1%
  • ● Operating Profit/Loss: €(152)-€(72) million


On August 20, 2021, Spotify announced a program to repurchase up to $1.0 billion of its ordinary shares. The repurchase program will expire on April 21, 2026. Through September 30, 2021, the company repurchased 157,510 shares for €30 million under this program at an average cost of $222.86 per share.

01 Dec 2021 | Press release

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01 Dec 2021 | Press release

Bigger than ever, The British Music Embassy returns to SXSW

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01 Dec 2021 | Press release

Spotify’s 2021 Wrapped Results & Experience is Here

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01 Dec 2021 | Press release

The Sound of the Year Awards 2021

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01 Dec 2021 | Press release

Spotify for Artists - Artist Wrapped 2021

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01 Dec 2021 | Press release

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30 Nov 2021 | Press release

Chrysalis Records appoints Alison Wenham OBE as first Chief Operating Officer

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30 Nov 2021 | Press release

Lineup announced for return of The National Lottery’s Revive Live Tour

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30 Nov 2021 | Press release

BRITs Rising Star supported by BBC Radio 1

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30 Nov 2021 |

European Talent Exchange Programme: Still boosting international careers

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30 Nov 2021 | Press release

Leila Oliveira named as General Manager of Warner Music Brazil

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30 Nov 2021 | Press release

Applications now open for the FAC Step Up Fund supported by Amazon Music

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30 Nov 2021 | Press release

Baby Shark unveils its first-ever NFT collection

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30 Nov 2021 | Press release

Caldecott Music Group introduced as new company brand of BandLab Technologies, NME Networks, and Vista Musical Instruments

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30 Nov 2021 | Press release

Proper Sign Distribution Deal with Independent Venue Week

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30 Nov 2021 | Press release

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30 Nov 2021 | Press release

BMG acquires Mötley Crüe recordings catalog

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29 Nov 2021 | Press release

The BRITs are Coming - nominations show


29 Nov 2021 | Press release

Phebe Hunnicutt appointed SVP, International, Warner Recorded Music

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29 Nov 2021 | Press release

AWAL announces duo of senior UK marketing promotions

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29 Nov 2021 | Press release

Wizkid to livestream his sold-out 'Made in Lagos Tour' exclusively on YouTube

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29 Nov 2021 | Press release

NTIA Responds to PM Press Statement on Omicron Variant

Following the announcement today of additional measures being required in indoor settings in response to cases of the new variant being reported within the UK.   Michael Kill CEO NTIA says“The reported detection of the new variant in the UK is hugely...more

29 Nov 2021 | Press release

Phil Kaso upped to SVP, Rock Promotion for Atlantic Records/Elektra Music Group

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25 Nov 2021 | Press release

Featured Artists Coalition announces the FAC Step Up Fund supported by Amazon Music

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25 Nov 2021 | Press release

Swedish streaming service for concert video, Staccs, makes a sweep of strategic hires and launches Staccs Originals

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25 Nov 2021 | Press release

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25 Nov 2021 | Press release

Hannah Joseph and Horace Trubridge elected as Performer Directors at PPL Annual Performer Meeting 2021

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25 Nov 2021 | Press release

Stefania Passamonte elected to BPI Council and Alice Dyson re-elected

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25 Nov 2021 | Press release

Distiller Music Group announces new hires and promotions across team

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24 Nov 2021 | Press release

Music Leaders’ Drive To Tackle Racism And Boost Inclusion Wins Backing From Football Legend And Diversity Champion Rio Ferdinand

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01 Dec 2021

  • What do we mean by fairness in music? (see Opinion)

30 Nov 2021

  • Spotify's plan to become the "Instagram and TikTok of audio" (see Digital)

  • BRITs Rising Star: shortlist announced (see News)

29 Nov 2021

  • Kill the bill that would stifle UK music investment, says Tony Wadsworth (see Opinion)

26 Nov 2021

  • StubHub accused of failing to disclose when customers buy tickets from professional touts (see News)

  • "Hipgnosis chief sounds off-key" (see Analysis)

25 Nov 2021

  • Support, rejection and summary of the proposed Copyright Bill (see News)

  • Is the music industry’s future on the blockchain? (see Comment)

24 Nov 2021

  • State of play: The UK majors (see Features)

  • Copyright Bill: AIM asks members to 'take action to prevent proposed changes to the law' (see News)

  • Reaction to the non-gendered BRIT Awards (see News, Features)

23 Nov 2021

  • BRIT Awards 2022 to remove gendered categories (see News, Opinion, Showbiz)

22 Nov 2021

  • Spotify takes shuffle as default off album pages (see Digital)

  • Four Tet in dispute with Domino (see News)

19 Nov 2021

  • The NFT Bay links 'all NFTs' on Ethereum and Solana blockchains (see Bigger Picture)

  • Lyrics now available to all Spotify users (see Digital)

  • Artist & Manager Awards - winners announced (see News)

18 Nov 2021

  • Catalogues: David Bowie to Warner?; Sting to Universal?; Lindsay Buckingham to Downtown (see Deals)

  • Global value of music copyright up 2.7% in 2020 (see Analysis)

  • Warner Music launches WMX services division for artists, labels and brands (see Business)