Spotify reports weak total monthly user growth
Spotify reported fewer than expected monthly active users (MAUs) in the second quarter, blaming the pandemic for the sluggish growth.
The streaming company posted 365 million MAUs, up 22% year-over-year. But it fell short of its guidance of 366 million to 373 million users.
Spotify pointed toward the ongoing Covid-19 pandemic affecting performance in several markets and said it paused some marketing campaigns. Separately, a user sign-up issue associated with a global third party platform created unexpected intake friction, which also impacted MAU growth, the company said.
While it isn’t clear how long the slowdown will last, the Stockholm-based company expects to conclude the year with 400 million to 407 million users.
“While I’m disappointed that our MAU growth was softer in the last half of Q1 and the first half of Q2, the good news is that we’ve seen that trendline reverse and all the leading indicators I’m seeing show that we are back on track,” said Daniel Ek, Founder and CEO.
Spotify’s premium, or paid, subscribers grew 20% year over year to hit 165 million in the quarter. That’s within the company’s guidance range. The company’s sales grew 23% to 2.33 billion euros, beating forecasts, while gross profit stood at 663 million euros.
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