There is no denying that streaming services are the future when it comes to media consumption, whether you are talking watching movies on Netflix or Amazon Prime, or you are streaming music on Spotify, there is a huge list of people that are swarming to these services just so they can have a good time with the overall experience.
Spotify today posted their results for the third quarter of the year, and they have reported revenue of $2.32 billion during the July-September period, which happens to be an increase of 14% compared to the same period from last year. However, at the same time, revenue per user has dropped by %10, which means that Spotify, in return, has last $118 million.
While Spotify Now Has 320 Million Users, The Music Service Seems to be Losing Money at the Same Time
Posting their results, this is what Spotify had to say.
The business performed at a high level in Q3. Highlights included strong MAU and subscriber growth, a recovery in global consumption hours, record low churn below 4%, better than expected Gross Margin, and Free Cash Flow of €103 million. Headwinds included negative effects from FX movements which slowed revenue growth by 500 bps on a constant currency basis. Revenue was slightly better than expected excluding the impact of FX. Notably, some of our more mature regions exhibited accelerating user growth, our advertising business returned to growth, and new market launches in Russia and 12 surrounding markets unlocked significant pent-up demand, adding a helpful accelerant to our results.
Needless to say, the results are impressive. Spotify currently stands at 320 million monthly active users around the world, which serves as a growth of 29% compared to last year's growth in the same quarter. As per the company, this growth was possible because of successful marketing campaigns in a number of markets as well as its launch in Russia. Spotify has also witnessed a YoY growth in the number of premium subscribers, which means that it has now up to 144 million paying users.
Thanks to the strong growth in the user base, Spotify has now extended its lead as the world's leading music streaming service. Spotify is also expecting to add around 25 million users and 10 million subscribers in the fourth quarter of the year.
