In the second quarter, Spotify delivered a loss of EUR 2.20 per share while revenue grew 26% to EUR 1.27 billion. The company’s revenue growth was reportedly impacted by GDPR in the quarter. Spotify rolled out an affordable family plan, which helped drive growth in its premium subscription base. The majority of Spotify’s revenue comes from its premium subscribers.
Average revenue per user fell 12% in the second quarter on a year-over-year basis, but grew 4% sequentially. The sequential increase was mainly due to the timing of Spotify’s bi-annual campaigns. The company’s monthly active users grew 30% year-over-year in the second quarter, driven by strength in Latin America and Rest of World versus other markets.
Spotify’s family plan boosts subscriber growth in Q2
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For the third quarter, Spotify guided for year-over-year revenue growth of 17-36%, which would bring total revenue to EUR 1.2 billion to EUR 1.4 billion. The company expects monthly active users to grow 25-29% to about 188 million to 193 million along with a growth of 36-43% in total premium subscribers, bringing the total number to between 85 million and 88 million.
Spotify competes with Apple Music, whose parent Apple (AAPL) is expected to report fourth quarter 2018 earnings results on November 1.
As of 12 pm ET, Spotify’s shares were down about 3% at NYSE.