Spotify cruises past quarter-of-a-billion subscribers, as it eyes $1.5bn annual operating profit in 2024

November 13, 2024

Spotify is on course to achieve its first-ever full year as a profitable company – to the tune of USD $1.5 billion.

The company yesterday (November 12) published its financial results and user numbers for the third quarter of 2024 (ended September 30).

The headline stat from the music streaming giant: Spotify’s global Premium Subscriber base grew to just over quarter-of-a-billion (252 million) paying users in Q3.

That was up 12% YoY, and up by 6 million net subscribers on the 246 million subs that SPOT counted at the end of the prior quarter (Q2 2024).

The company’s 6 million net subscriber additions in Q3 were 1 million ahead of guidance.

In 2024 year-to-date (to end of September), Spotify has added +16 million net paying subscribers. (It finished 2023 with 236 million paying subs.)

In the same period of 2023 (i.e. the year’s first nine calendar months), Spotify added +21 million paying subs to its reach.

Commenting on the company’s results, Spotify Founder & CEO Daniel Ek said: “We’ve never been in a stronger position, thanks to the outstanding execution by our team. I’m incredibly proud of the way we’ve delivered and the progress we’ve made.”

Credit: Sipa US / Alamy
“We’re where we set out to be — if not a little further — and on a steady path toward achieving our long-term goals.”
Daniel Ek

Added Ek: “We’re where we set out to be — if not a little further — and on a steady path toward achieving our long-term goals.

“This relentless pursuit of innovation and commitment to growth sets us up to deliver the most valuable user experience in the industry, while reinforcing the core strengths that make Spotify unique. I am very excited about what lies ahead for us.”

Monthly Active Users

Spotify’s total global Monthly Active Users (MAUs) grew 11% YoY to 640 million in Q3 2024 and by 2% (14m) compared to the previous quarter (Q2 2024) when the platform counted 626 million MAUs.

The company’s 14 million MAU additions in Q3 were also 1 million ahead of guidance, with the Rest of World and Latin America seeing the biggest growth in the quarter (see below).

Premium revenue

In terms of finances, Spotify reported that its Premium subscriber growth translated into Premium revenue of €3.516 billion ($3.861bn) in Q3 “despite greater than anticipated headwinds from unfavorable currency movements”.

Spotify’s Premium revenue was up 24% YoY at constant currency (see below).

In terms of subscriber performance geographically, Spotify reported growth across all regions with “outperformance” led by Europe (38%) and Latin America (22%).

Spotify saw 27% premium subscriber growth in North America (see below).

Ad-supported revenue

Spotify’s ad-supported revenue, meanwhile, hit €472 million ($518.4m) in Q3, up 7% YoY at constant currency (see below).

Spotify noted in its investor presentation that it saw ad-revenue growth in a “challenging brand environment” and that its music advertising was driven by “growth in impressions sold, partially offset by softness in pricing”.

Profitability

The company’s Gross Margin finished at 31.1% in Q3.

Meanwhile, Spotify posted a quarterly operating income of nearly half a billion dollars – at €454 million ($499m) – in the quarter.

That put Spotify’s YTD (i.e. first three quarters) operating profit in 2024 at EUR €888 million (approx USD $975m), and firmly on course for annual profit in the full year.

In fact, Spotify’s now forecasting FY operating profit in 2024 of EUR €1.37 billion (approx $1.50bn).

In terms of guidance for Q4 2024, Spotify forecasts reaching 665 million MAUs, an addition of around 25 million net new MAUs in the quarter.

The company projects its total Premium Subscriber base to hit 260 million in Q4, an addition of approximately 8 million net new subscribers in the quarter.

Spotify forecasts an operating income of €481 million for Q4, and total revenue of €4.1 billion.