UPDATED: Spotify is up to 87 million paid subscribers, a 40% jump, the company announced in its third quarter earnings results today, and its total number of users is up 28% to 191 million. The company projected that its paid subscribers will be between 93 million and 96 million for the fourth quarter, while total monthly users will be between 199-206 million.
“Growth continues to be healthy across our Family and Student plans, and the strong retention characteristics of this base continue to drive churn lower,” the company said.
While its investment in China’s Tencent Music helped the company post its first-ever profit, it remains likely that the company will post another loss in the fourth quarter, and combined with slower-than-anticipated subscriber growth, the company’s stock dipped nearly 10% in the hours after the call.
Revenue for Q3 was $1.54 billion, a 31% year-over-year boost, and ad-supported revenue rose 28% to $162 million. Operating loss was $6.8 million, up 92%. The bulk of the revenue came from premium subscriptions while a smaller percentage is from its ad-supported service.
Spotify CEO/cofounder Daniel Ek and CFO Barry McCarthy spoke of the areas of growth the company is targeting, particularly podcasting. “We’re in the early days of podcast marketing,” Ek said. “Non-music content has an important place” in the company’s future plans.
He also declined to comment on a question from a reporter about whether it is in the running to buy into Universal Music Group, which is expected to put up a stake for sale in the coming months.
“I can’t make any comment on any deal negotiations at this point,” said Ek.
Ek also spoke of the company’s recent upgrades in its Spotify for Artists program, saying that 67,000 artists have submitted music for inclusion in playlists (with 10,000 added), and references the Music Modernization Act, and said that the company controversial moves toward direct distribution of artists music is not the same as being a recording label.
“We don’t view our strategy as being in opposition of our partners,” he said, claiming that its model means that “more artists can be successful and more labels can be successful. It’s not Spotify wins, labels lose.”
Europe now accounts for 36% of its monthly average users, while North America has 31% and Latin America 22%.