Spotify has quarterly revenue above expectations, with a jump in subscribers

Spotify on Wednesday reported second-quarter revenue above analyst estimates, helped by a 14% jump in paying subscribers, as well as an upbeat outlook for the current quarter.

Its monthly active users increased by nearly a fifth to 433 million, above expectations of 428 million, and is expected to hit 450 million in the third quarter.

The Swedish music streaming company’s revenue comes from paying subscribers and showing ads to users who use its service for free. Ad-supported revenue increased 31% in the quarter.

“We saw a little bit of weakening in the last two weeks of the quarter,” Spotify CFO Paul Vogel said in an interview.

“While we expect advertising to become a much larger part of our business over the long term… it’s still a reasonably small amount of our revenue at just 13%,” he said.

Premium subscribers, which account for the majority of the company’s revenue, rose to 188 million, beating analysts’ expectations of 187 million.

Spotify reported a 23% increase in revenue to €2.9 billion, compared with expectations of €2.8 billion, according to IBES data from Refinitiv.

For the current quarter, the company forecasts 194 million paid subscribers, in line with expectations. It also expects revenue of €3 billion, above estimates of €2.95 billion.

Car Thing

The company will stop producing the Car Thing, a voice-controlled streaming device installed on the dashboard of vehicles. It was released in April of last year ahead of wider rollout.

Priced at $89.99, the device is currently discounted to $49.99.

At this price point and with growing supply chain problems, the company has failed to achieve an attractive economic profile, Chief Executive Daniel Ek said in an interview.