The world’s largest streaming music service has posted its Q1 2020 earnings—and things are looking good for the company. Despite the COVID-19 pandemic wreaking havoc on many companies’ bottom lines, Spotify announced its business “met or exceeded our forecast for all major metrics” for Q1.
Here are the main highlights:
- Monthly active users (MAU) grew 31% year-over-year to 286 million at the end of Q1.
- Ad-supported MAUs totaled 163 million at the end of Q1, up 32% year-over-year.
- Premium subscribers totaled 130 million at the end of Q1, up 31% year-over-year.
- Total Q1 revenue was €1.848 billion (about $2 billion), up 22% year-over-year.
- Of that, premium revenue was €1.7 billion (about $1.8 billion) in Q1, up 23% year-over-year.
- Average revenue per user (ARPU) was €4.42 in Q1—a 6% decline year-over-year.
The main reason Spotify gave for its ARPU being down year-over-year was that “a significant portion of this decline was driven by the continuation of longer free trials rolling over from Q4 and additional intake during Q1.” Spotify says that excluding the impact of free trials, its ARPU would have declined 4% year-over-year due to “continued mix shifts in product and geography.”
Spotify also noted how the effects of the COVID-19 pandemic and its resulting lockdowns have affected where people listen to its service, noting, “Not surprisingly, we have seen usage in Car, Wearable, and Web platforms drop (double digits in some instances). However, the audience through TV and Game Consoles has grown materially, in excess of 50% over the same time period.”
Finally, Spotify reiterated its Full Year 2020 Guidance. The company says it’s still on track to hit 328 million to 348 million MAUs and 143 million to 153 million premium paid subscribers by the end of the year. The only metric Spotify did revise down is total revenue. The company now says it expects to bring in between €7.65 billion to €8.05 billion ($8.3 billion to $8.6 billion), down from €8.08 billion to €8.48 billion ($8.6 billion to $9.2 billion).