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What just happened? Spotify continued to add subscribers and monthly active users while increasing its revenue in the second quarter. It still made a net loss, but the streaming giant is unlikely to be concerned when advertising growth and the average revenue per user were also up.
The number of premium (paying) Spotify subscribers reached 188 million at the end of the second quarter. That's up from 182 million in the first quarter and 14% year-over-year. Meanwhile, monthly active users (MAUs) hit 433 million, up from 422 million in Q1 and 19% YoY. Both figures exceeded the company's own forecasts.
The increased number of users marks Spotify's largest ever second-quarter growth, something it puts down to factors including reactivations in Europe and "Gen Z strength" in Latin America.
Spotify had forecast lower growth numbers as a result of losing users following the closure of its Russian operations in April. Chief Executive Officer Daniel Ek was expecting to end June with 187 million paying subscribers and 428 million monthly active users.
Spotify's income from advertising was also up, by 31 percent to $365 million, "reaching an all-time high as a percent of total revenue at 13 percent." Ad sales helped push revenue up 23% to €2.86 billion ($2.90 billion), and the average revenue per user went up around 16 cents to $4.60. However, the company still saw a quarterly operating loss of €194 million ($197 million) and a net loss of €125 million ($127 million).
The Verge notes that Spotify's success comes amid challenging times in its podcast business. 'Reply All' broadcast its final episode on June 23 after co-hosts Alex Goldman and Emmanuel Dzotsi left production company Gimlet. Additionally, the Obamas opted against extending the Spotify deal they penned in 2019 and instead signed with rival podcasting platform Audible.
Spotify still draws in plenty of podcast fans thanks to shows like The Joe Rogan Experience; the controversial host has a deal with the company reportedly worth over $200 million.
Back in January, musician Neil Young demanded the Spotify remove his content over Rogan's vaccine "disinformation." Several other artists joined the campaign, but the podcast, which draws around 11 million listeners per episode, remained.