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Spotify Q3 2021 earnings Premium matures as advertising accelerates

Report by Mark Mulligan
Cover image for Spotify Q3 2021 earnings
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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.

Key Insights

  • 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

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