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Spotify Q3 Earnings Roundup – Digital Gabe
Digital Gabe
Cutting Edge Commentary On All Things Media

Spotify Q3 Earnings Roundup

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During yesterday’s Q3 earnings call Spotify announced quarterly revenue of $1.97B, compared to $1.57B in Q3’18. Most of the revenue increase was derived from new subscriptions, which are now up to 113M worldwide.  Here are some of the more interesting takeaways from the call.

  • Ad Revenue: In Q3 $148M was derived from ad sales, which represents only 7.5% of their total rev.  This shows Spotify is increasingly dependent on subscriptions to bolster their bottom line – which makes sense given they’re in a dog fight for subs with Apple and Amazon, both of which don’t even sell ads on their streaming platforms.  Spotify’s ad rev also took a hit of about $10M in Q3 due to its decision to transition off Google’s ad serving platform.   According to CFO Barry McCarthy, the loss is a short-term issue which will be corrected in Q4.
  • Podcasting:  Spoken word streaming is proving to be a bright spot for Spotify, which reported a 39% increase in podcast consumption YoY.  The streamer now has 500,00 podcasts on platform, including 22 original-content shows which are produced by its in-house Spotify Studios unit.  They’re now the second largest podcaster in the world, albeit way behind industry leader Apple, with 13.1% of all podcast downloads.
  • US Subscribers: One other interesting stat is the geographic distribution of Spotify’s subs.  In the earnings call they disclosed that 30% (34M) of their subscribers are in North America – estimates for US-only are somewhere in the 26-28M range.  That number is reasonably close to what it was a year ago, which tells you that NA sub growth has slowed, while growth in developing countries is still accelerating.  Not a surprise, but interesting to see.

Here’s the entire Zacks analysis if you want to go deeper into the data.


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