Spotify Q3 2021 earnings Premium matures as advertising accelerates
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The 20,000 foot view: Spotify is in a transition phase. Monthly active user (MAU) growth bounced back, but user growth is in a mid-term slowdown phase while the business begins its transition to emerging markets and ad-based audio – with the latter showing more signs of movement than the former.
- Short-term user growth recovered: Spotify added million MAUs in 2021 to reach million MAUs, compared to the addition of nine million in 2021
- Spotify continued to grow subscribers steadily, adding (net) seven million for the second quarter in a row to reach million subscribers by end 2021
- Quarter-on-quarter (QoQ) subscriber growth was the same for all regions in 2021 as it was in 2021
- Europe grew most million subscribers) and North America next on million subscribers, while Rest of World growth was small again subscribers)
- Rest of World ad-supported user growth was strong though, and the region overtook Europe as the largest ad-supported MAU region million ad-supported MAUs)
- User growth is in a mid-term slowdown phase. Between 2020 and 2021, Spotify added million subscribers (down three million from one year earlier) and million ad-supported MAUs (down million)
- Spotify is having to work harder to achieve even slowing growth. Sales and marketing spend per acquired user increased in both 2020 and 2021
- In contrast to its user growth story, Spotify’s revenue narrative continues to improve. Total revenues were up by YoY in 2021 to reach billion, compared to MAU growth of
- On a year-on-year (YoY) basis, ad revenue grew by to reach million compared to a more modest premium revenue growth
- Ad revenue represented of all Spotify revenue in 2021, up from one year earlier
Companies and brands mentioned in this report: Spotify