Spotify hit 246 million paying subscribers in the second quarter of 2024, up 12 percent year-over-year.
The total number of paid subscriber additions, up 7 million, was 1 million above guidance. Shares of Spotify were up 14 percent in pre-market trading Tuesday.
The audio giant’s total number of monthly active users grew 14 percent year-over-year to reach 626 million but came in under its prior guidance of 631 million.
The company noted that it saw another quarter of “MAU variability,” however “funnel conversion remained strong, particularly in developed markets where we recently adjusted pricing.” Spotify added a less expensive ad-free plan in June, for $10.99 a month, which does not include its audiobooks offering. Prices had been raised on the other plans earlier that month.
Spotify reported total revenue of €3.8 million, in line with guidance, while operating income came in above guidance at €266 million. Operating income was helped by lower personnel and related costs and lower marketing spend, but partially offset by €59 million in social charges, which are payroll taxes associated with employee salaries and benefits in select countries. At the end of Q2, Spotify’s workforce consisted of 7,372 full-time employees globally. Spotify laid off about 1,500 workers in December.
The company’s gross margin finished at 29.2% in Q2, up 510 bps year over year, which it said “reflects improvement across music and podcasting” but was partially offset by the cost of its audiobooks offering.
“It’s an exciting time at Spotify. We keep on innovating and showing that we aren’t just a great product, but increasingly also a great business. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future,” said Spotify CEO Daniel Ek.