Spotify Q2 2020 Earnings In the Shadow of COVID
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The 20,000 Foot View: Spotify’s share price grew strongly in June 2020, with the markets responding positively to its podcast investments. However, while that increase was sustained throughout July, by mid-August the share price was heading back down to late-June levels. Though it sat markedly higher than at the start of June, the fluctuation illustrates Spotify’s challenge of maintaining strong enough market momentum to support the promise of its strategic bets. 2020 saw further signs of user base slowdown but revenue growth that exceeded that of the major record labels.
Key Insights
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continued to shape Spotify’s user metrics in 2020: total monthly average users (MAUs) were up year-on-year (YoY) but quarterly MAU additions were down from million in 2019 to million in 2020
- Ad-supported MAUs sequentially by million in 2020 to million in 2019
- The million subscriber additions were consistent with and resulted in Spotify meeting forecasted million subscribers
- North America Europe drove of quarterly subscriber compared to Latin America and of World having driven of in 2020.
- Latin America Rest of World drove of ad-supported MAU growth
- Once again, was a quarter of premium and margin growth but a on both counts for ad-supported. revenue was up YoY, increasing million, compared to an increase million one year earlier
- Ad-supported revenue down annually, compared to a growth in 2019, while ad-supported margin was negative for the successive quarter
- Spotify’s revenue becoming uncoupled from major label revenue, growing (in current currency terms) annually by compared to the majors
Companies and brands mentioned in this report: Spotify