Lumpy growth during the pandemic looks like it's behind Spotify now, CEO Daniel Ek says.
Spotify's total number of monthly listeners climbed 19% to 381 million in the third quarter, the global music streaming service said Wednesday. The company continues to expect between 400 million and 407 million listeners who tune in at least once a month by the end of the year.
Spotify's paid members -- which excludes all the people who listen free with advertising -- also rose 19%, to 172 million, in the midpoint of Spotify's July guidance. Spotify makes more money from its paying subscribers than the ones who listen free with ads.
Over the last year and a half, the COVID-19 pandemic caused lumpiness in Spotify's growth, as people's interest in listening to music on the go waxed and waned depending on whether they could actually go anywhere. But CEO Daniel Ek said Wednesday that signs point to those inconsistencies being "largely behind us."
Spotify shares were up 6.8% to $269.32 in trading early Wednesday.
The latest figures reiterate Spotify's dominance in subscription music around the world. The company appeared to remain above its No. 2 competitor, Apple Music. Apple doesn't routinely disclose its paid membership and hasn't offered an update in more than two years, obscuring just how much of a lead Spotify may have. Apple Music last disclosed the size of its subscriber base in June 2019, when it had 60 million members, though it has surely grown in the intervening years. (According to music industry researcher Midia, Apple holds about 16% of the world's subscription music market, and Spotify's share is double that.)
As culture at large has shifted to streaming as the most common way people listen to tunes, Spotify emerged as the leader in the fight to dominate subscription music.
Unlike Spotify, Apple doesn't have a free tier that lets anyone listen to music with advertising. Apple has never disclosed a monthly-active-user stat; almost all people who use Apple Music are subscribers.
Apple didn't immediately respond to a request for comment.
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For the second quarter, Sweden-based Spotify reported a slim profit of 2 million euros ($2.3 million), swinging from a loss of 101 million euros a year earlier. But on a per-share basis, loss narrowed to 41 cents from 58 cents. Revenue rose 26% to 2.5 billion euros in the quarter.
Analysts on average had expected a loss of 18 cents in the latest period, on revenue of 2.4 billion euros, according to Refinitiv Eikon.