Spotify adds 8m subscribers in Q2 to reach 83m, expects 97m by end of the year

The world’s largest streaming service Spotify has met most of its expectations in its financials for Q2 2018, ending in June.

According to its posting, it took on an extra 7 million users to reach a total of 180 million, and an extra 8 million premium subscribers worldwide to a current tally of 83 million.

Those numbers were up 30.4% and 40.7% respectively year-on-year, and up 5.9% and 10.7% respectively quarter-on-quarter.

Much of the rise was due to Family Plan and Student Plan sign-ons.

The company reported: “Growth in our emerging regions of Latin America and rest of world continues to outpace growth in our more established markets.”

37% of Spotify’s overall listeners are in Europe, 21% in Latin America and 11% in the rest of the world.

Meanwhile, 31% of its subscribers are in North America, which translates to about 25.7 million people.

45.1% of Spotify’s listeners are premium subscribers, but they accounted for 90.3% of the company’s revenues in Q2, compared to 82.2% a year ago.

Total Q2 revenue was €1.27 billion (A$2 billion), up 26% from the year-earlier period.

Subscriber revenue was €1.15 billion ($1.8 billion) in Q2, up 27%. Ad-supported revenue grew 20%, to €123 million ($194.2 million).

Cost of revenues – including royalties – was €944 million ($1.49 billion) inQ2, making up for 74.2% of its turnover.

In comparison, the figure was just under 77% in Q2 2017, and 85.4% in Q2 2016.

Operating losses grew to €90 million ($142.1 million), a strong figure given the €79 million ($124.7 million) in the same quarter in 2017.

Co-founder and CEO Daniel Ek took the opportunity to deny that the company’s moves to strike direct deals with artists did not in any way mean it had designs on being a record label.

He said Spotify had always acquired content that way, and that the deals with artists were not exclusive to the company.

“Licensing content does not make us a label…We are not acting like a record label.”

For the third quarter, Spotify forecast total monthly active users to be 188 million-193 million, with premium subs to be 85 million-88 million.

It projected revenue of €1.2 billion-€1.4 billion ($1.89 billion – $2.2 billion) and an operating loss of €10 million-€90 million ($15.7 million—$142.1 million)

In a longer-term forecast, Spotify expects by Q4 to hit 199 million-207 million, users, subscribers to 93 million-97 million, with revenue of €1.35 billion-€1.55 billion ($2.1 billion— $2.4 billion) and operating loss of €20 million-€100 million ($31.5million – $157.9 million)

As of June 30, Spotify had 3,969 full-time employees and contractors globally.

Most of its hires in Q2 were for R&D.