The 456 million users per month that Spotify reached in the third quarter of 2022 is a truly extraordinary number for the most important audio platform in the world.
That data is a 20 percent higher than a year ago and it is higher than the expectations that the Swedish company itself had set.
However, Spotify shares did not react well to the news and in the premarket as of this Wednesday, October 26, they are down (-5 percent).
According to the company, paid subscribers reached 195 million users in the quarter, one million more than the previous orientation of the platform of streaming of music.
Also, Spotify said it had a very special strength in Latin Americaincluding Mexico, Argentina, Colombia and Brazil, where it outperformed expectations.
“We are where we thought we would be”: Spotify CEO
Spotify’s total monthly active users (MAUs) grew 20 percent to 456 million, six million above previous guidance, a net addition of 23 million, representing its largest growth in a third quarter to date .
As we explained before, Spotify Premium subscribers reached 195 million, a gain of seven million in the period (about a million more than anticipated) and 13 percent more buying year over year.
“There is a lot of global uncertainty, but our business continues to do very well around the world,” CEO Daniel Ek said in the text that accompanied the financial report published by the company.
“With a war, a pandemic, inflation, disruption to supply chains, and the threat of a global recession, I am proud of everything we have achieved and that, despite all this, we are where we thought we would be,” he added.
In the report, Ek said that Spotify is considering raising the price on its US subscription plans after Apple Music and YouTube Premium increases.
“It’s something we’ll discuss with our record company partners,” he said.
The financial report Q3 2022 full of Spotify.
Spotify gains users, but continues to lose money
Spotify’s total revenue was €3.045 billion, slightly above forecast, representing year-on-year growth of 21 percent.
Premium revenue grew 22 percent (to €2.7 billion) and advertising revenue grew 19 percent (€385 million).
Revenue grew by double digits worldwide except Europe, where “difficult regional economic conditions” impacted, the company said.
The problems (and the explanation for the stock decline) come when you see Spotify’s gross margin: in the third quarter was below expectations at 24 percent.
According to the company, it was affected by the payment of “a large publishing contract outside the United States.”
Also, Spotify reported an operating loss of 228 million euros that the company attributed to higher payroll costs with the expansion of its global advertising sales team; investments in the purchase of other platforms; and the effect of acquisitions such as Podsights, Findaway, Sonantic, Chartable, Whooshkaa and Heardle.
A) Yes, Spotify reported a loss in the third quarter of 194 million euroshigher than analysts’ expectations
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