Music streaming giant Spotify has todayfinancial results for the second fiscal quarter of 2020, reporting 108 million Premium Subscribers globally and approximately $1.8 billion in revenue, with its overall membership growing from 217 million last quarter to 232 million now.
“The business outperformed our expectations in 2Q19, with Gross Margin up slightly Y/Y, despite our investments in podcasting, and revenue grew more than 2.5x faster than the growth in operating expenses,” the company noted in a press release.
While the company has added nearly 8 million paying customers in the last three months alone, Spotify still believes it’s not quite close enough to its planned target of 110 million. The company also noted that its “winback” campaigns, which are used when people who don’t continue paying for the product get offered a further three months at discount, are working quite well.
Intake from our bi-annual campaign was in line with our expectations, monthly churn declined both sequentially and Y/Y to a record low 4.6%, and our winback percentage on gross ads reaccelerated Q/Q. However, intake into our Student product was below plan.
Total revenue was €1,667 million in Q2, representing growth of 31% Y/Y. Premium revenue was €1,502 million of the total and grew 31% Y/Y, ahead of our expectations. Ad-Supported revenue was €165 million and grew 34% Y/Y, a meaningful acceleration of growth from Q1.
Spotify also highlighted that Podcasts are proving to be one of the biggest drivers of growth and in three months, the company has seen listener figures increase by more than 50%. The company now expects to see its user numbers hit up to 245 million by the end of the next quarter.