Spotify profits are up. In a public letter to shareholders, the company provided some insights into recent growth. In addition to growth, they also shared some successes in cutting costs.
With the announcement, Spotify is expecting to beat expectations for third-quarter revenue. While sharing a $60 million operating profit for Spotify is huge, it is largely in part of a major one-time tax windfall back in 2018.
While reaching 248 million monthly active users, Spotify shifted their focus from promoting original content, to tools for artists. Some of these included the Spotify For Podcasters, Spotify for Artists (which is up 465,000 monthly active artists) and beyond. The letter also shares Spotifys confidence against its major competitor, Apple Music:
We continue to feel very good about our competitive position in the market. Relative to Apple, the publicly available data shows that we are adding roughly twice as many subscribers per month as they are. Additionally, we believe that our monthly engagement is roughly 2x as high and our churn is at half the rate. Elsewhere, our estimates imply that we continue to add more users on an absolute basis than Amazon.
Hitting a revenue around €1.74-€1.94 billion, Spotify profits are up and they clearly must be doing something right. Spotify Podcast hours streamed is up 39% in the U.S. too, while growing abroad in Europe as well. The acquisition of SoundBetter back in September doesn’t hurt either, which currently has 180,000 registered users. Let’s hope Spotify stays up in profits with a bright future ahead.