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Spotify Q3 2021 earnings Premium matures as advertising accelerates

Mark Mulligan
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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            recovered: Spotify added            million MAUs                       2021 to reach            million MAUs,            to the addition of nine            in            2021
  • Spotify continued            grow subscribers steadily, adding (net)            million for the second quarter            a row to reach            million            by end            2021
  • Quarter-on-quarter (QoQ)            growth was the same for            regions in            2021 as it            in            2021 
  • Europe grew                       million subscribers) and North America            on            million subscribers, while Rest            World growth was small again           
  • Rest of            ad-supported user growth was strong            and the region overtook Europe            the largest ad-supported MAU region            ad-supported MAUs)
  • User growth            in a mid-term slowdown phase.                       2020 and            2021, Spotify added            subscribers (down three million from            year earlier) and            million ad-supported            (down            million)
  • Spotify is            to work harder to achieve            slowing growth. Sales and marketing            per acquired user increased in            2020 and 2021
  • In contrast            its user growth story, Spotify’s            narrative continues to improve. Total            were up by            YoY in            to reach            billion, compared to            growth of           
  • On a            (YoY) basis, ad revenue grew                       to reach            million compared to            more modest            premium revenue growth
  • Ad revenue                       of all Spotify revenue in            up from            one year earlier 

Companies and brands mentioned in this report: Spotify