Spotify Stock Surges As Monthly Active Users Crack 433 Million, Ad Revenue Jumps By 30%

Spotify stock (NYSE: SPOT) is surging after the company added six million paid accounts and about four million ad-supported users during Q2 2022, when revenue from the latter hiked by nearly 30 percent quarter over quarter.

The Stockholm-based audio entertainment platform unveiled these and other performance specifics for April, May, and June of 2022 in its Q2 report today. With execs having spoken in recent months about the need to effectively communicate information to investors, the report features a new, aesthetically pleasing layout and far more side-by-side comparisons of projections and results.

As mentioned, Spotify premium users jumped by six million QoQ to crack 188 million – representing a 14 percent YoY boost – per higher-ups. Additionally, ad-supported MAUs, numbering 256 million at June’s end, improved by two percent QoQ and about 22 percent YoY, according to the breakdown. Spotify now boasts approximately 433 million MAUs, compared to 365 million monthly users as of Q2 2021, the document shows.

On the previously highlighted revenue front, Spotify indicated that it had pulled down €2.86 billion (currently $2.90 billion) during Q2 2022, including €2.50 billion ($2.53 billion) from paid accounts (up five percent QoQ and 22 percent YoY) and €360 million ($364.19 million) from ad-supported users (up 28 percent QoQ and 31 percent YoY).

Spotify posted a €194 million ($196.24 million) operating loss during this year’s second quarter, against a €6 million ($6.07 million) loss in Q1 2022. Execs attributed the latest total to heightened expenses, which are said to have increased by 38 percent YoY because of “higher personnel costs primarily due to headcount growth” and “higher advertising costs for growth initiatives” like “emerging markets” and “Gen Z.”

But these bolstered advertising expenses seem to be bringing about the desired result, for Spotify acknowledged a YoY MAU increase for Gen Z in Latin America as well as “outperformance in India, Indonesia and The Philippines as a result of marketing campaigns.”

At Q2 2022’s conclusion, 32 percent of Spotify MAUs were based in Europe (down two percent YoY), compared to 22 percent for North America (also down two percent), 22 percent for Latin America (flat against Q2 2021), and 24 percent for Rest of World, which, since Q2 of last year, has quietly picked up the total of four percent that North America and Europe lost.

And on the paid-account side, both Latin America (where 21 percent of Spotify premium users reside) and Rest of World (12 percent) saw their respective shares grow by one percent YoY.

“We continued to see triple digit Y/Y growth in total campaign volume for Sponsored Recommendations,” Spotify said of its controversial two-sided marketplace initiatives. Similarly, the service’s podcast library encompassed 4.4 million programs at Q2’s end (compared to four million in Q1), while “the number of MAUs that engaged with podcasts grew in the substantial double-digits” YoY, according to the analysis.

Looking forward to Q3 2022, Spotify has forecasted 194 million subscribers, 256 million ad-supported users, €3 billion ($3.03 billion) in total revenue, and a €218 million ($220.51 million) operating loss. As disclosed at the outset, Spotify stock was up about 14 percent from yesterday’s close at the time of this publishing, for a per-share price of $118.08.

Worth mentioning in conclusion is that Middle Eastern streaming service Anghami’s shares also improved this morning, achieving a current 21 percent gain from their prior close to reach $3.69 apiece. Like Spotify, Anghami touched a record-low stock price earlier in 2022.