Spotify Q3 2020 results beat expectations; Total MAUs up 29% at 320 mn

Despite the challenges stemming from the COVID-19 pandemic, Spotify saw a 13% increase in new music releases compared with Q2 on the platform. This was led by Taylor Swift’s folklore album, which set a Spotify record for the most first day album streams by a female artist while making Taylor Swift the most streamed artist on Spotify on any day this year. BTS also released their first all-English-language single Dynamite in August and had the biggest first day globally on Spotify for a single in 2020

Q3 was a standout quarter for Spotify’s podcasting efforts, beginning with the July launch of The Michelle Obama Podcast, an Original & Exclusive (“O&E”) podcast that became the #1 show globally on the platform in July and August, making it the top summer podcast. In September, The Joe Rogan Experience arrived on platform with video capability and became the #1 show in all of Spotify’s English-speaking markets while outperforming audience expectations. There are now over 1.9 million podcast titles available on the platform.

Total Monthly Active Users grew 29% Y/Y to 320 million, above the top of the guidance range. The MAU outperformance was buoyed by India, which benefited from successful marketing campaigns, as well as stronger than expected results from the July launches in Russia, CIS, and the Balkans. 22% of Spotify’s MAUs now engage with podcast content, up from 21% of MAUs in Q2 2020.

There are 144 million premium subscribers globally for Spotify, up 27% Y/Y, reaching the top end of the guidance range. Additionally, Spotify saw strong performance from the global rollout of its Duo product, with the Duo subscriber growth exceeding expectations.

Total revenue stood at €1,975 million in Q3 2020, representing a growth of 19% Y/Y. Premium revenue was €1,790 million of the total and grew 15% Y/Y. Ad-Supported revenue of €185 million outperformed the forecast, exhibiting a return to growth following the impact of the global pandemic in Q2.

Spotify CEO and founder, Daniel Ek, commented, “Spotify’s flywheel is accelerating faster with every new user and creator that comes on our platform. We’re building the world’s largest audio network and it’s clear that our strategy is working.”