Spotify has reported continued growth in users and profits during the second quarter of the year, although its monthly active user numbers fell short of market expectations.
The Swedish music streaming company announced on Tuesday that it had 777 million monthly active users at the end of June. This represents an increase of 16 million users compared to the previous quarter but is one million below the company’s forecast.
The weaker-than-expected user growth, coupled with a cautious outlook for the coming quarter, dampened investor sentiment.
Spotify said it expects to add about 11 million net subscribers in the third quarter, signalling slower growth than investors had anticipated.
Following the announcement, the company’s shares fell 2.6 per cent in early trading on the New York Stock Exchange.
Despite the slower user growth, Spotify’s paying subscriber base continued to expand.
The company ended the quarter with 300 million premium subscribers, an increase of seven million from the previous quarter and one million more than analysts had expected.
Spotify also delivered strong financial results during the period.
Its operating profit increased by 61 per cent year-on-year to 655 million euros (754 million dollars), while revenue rose by 14 per cent to 4.8 billion euros, meeting the company’s projections.
Spotify Co-Chief Executive Officer, Alex Norstrom, said the results demonstrate the strength of the company’s business model and its long-term growth potential.
According to him, Spotify has become part of users’ daily routines, from commuting and exercising to studying, gaming, dining and sleeping.
He added that the platform’s wide reach creates opportunities to introduce more services that meet users’ evolving needs.
As part of its growth strategy, Spotify has continued to introduce new features designed to attract and retain users.
The company recently launched Personal Podcasts, an artificial intelligence-powered feature that generates short podcasts tailored to individual listeners.
Spotify also announced that premium subscribers who are among an artist’s most dedicated fans will be given early access to purchase concert tickets before they go on sale to the general public.
The new offerings form part of Spotify’s broader effort to strengthen user engagement and maintain its position as one of the world’s leading audio streaming platforms.
