Reports Music

Spotify Q2 2019 Earnings Mature Markets Still the Engine Room of Growth

Report by Mark Mulligan
Cover image for Spotify Q2 2019 Earnings
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The 20,000 Foot XXX 2019 was another solid quarter for Spotify, adding the same number of subscribers it typically does in promotional quarters. Core metrics such as churn and average revenue per user (ARPU) all moved in the right direction, but Spotify remains out of contract with two major label partners and needs emerging markets’ subscriber growth to start picking up the slack before mature western markets slow.

Key Findings

  • Spotify hit XXX million subscribers in XXX 2019, a rise of eight million on XXX 2018 and up XXX million from one year earlier – the same annual increase as XXX 2019
  • Ad-supported monthly average users (MAUs) were up XXX million from XXX 2018
  • Spotify’s paid conversion rate rose half a point from XXX 2019 to reach XXX America and ‘Rest of World’ contributed XXX of all subscriber growth in XXX 2019. These markets will need to contribute more substantially moving forward
  • Ad-supported MAUs declined slightly from XXX 2019 in North America and Latin America but grew strongly in Rest of World to reach XXX million
  • Premium ARPU was up slightly to XXX while ad-supported ARPU reached XXX emerging markets will be key to subscriber growth, they will dent ARPU and premium revenue growth
  • Europe consolidated its position as a majority premium market for Spotify in XXX 2019 with a XXX paid conversion rate, up from XXX in XXX 2019
  • Premium revenue grew XXX to reach XXX million in XXX 2019, with gross margin recovering to the same level it was at one year earlier
  • Net premium revenue growth of XXX million was just XXX million more than in XXX 2018
  • Ad-supported revenue was up XXX on XXX 2019 to reach XXX million in XXX 2019
  • Podcasts are not yet delivering meaningful revenue
  • Spotify churn fell to XXX in XXX 2019, its lowest rate yet, having been at XXX one year previously
  • Artists representing the majority of streams rose from XXX in 2016 to over XXX in XXX 2019

Companies and brands mentioned in this report: Anchor, Gimlet, Parcast, Spotify, Warner Chappell

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