Spotify Q3 Revenue Up 21.4% to $3B as Subscriber Growth Beats Estimates

In the third quarter of 2022, Spotify revenue improved to 3.04 billion euros ($2.98 billion at the Sept. 30 exchange rate), marking an increase of 12% at constant currency and 21.4% as reported, the company reported Tuesday (Oct. 25). Subscription revenue grew 13% (22% as reported) to 2.5 billion euros ($2.46 billion) while subscribers improved 13.4% to 195 million — 1 million ahead of guidance. Led by podcasting, the company’s ad-supported revenue grew just 3% at constant currency (19% as reported) to 385 million euros ($378 million).

Spotify’s gross margin of 24.7% — which is 50 basis points below guidance — was slightly better than the 24.6% registered in the second quarter, but it was still two percentage points lower than 26.7% in the prior-year period. The company attributed the decline to its spending on non-music content and product enhancements, increased publishing rates and an adjustment to prior-period accruals. Those negative effects served to offset a favorable revenue shift to podcasting and continued growth in Marketplace, Spotify’s hub for artist services.

Spotify shares fell 6.7% to $90.54 in after-hours trading.


Financial metrics 

  • Revenue: 3.04 billion euros ($2.98 billion), +21.4% y/y, +13% at constant currency
  • Gross margin percentage: 24.7%, down from 26.7% in Q3 2021 
  • Operating loss: 228 million euros ($223.8 million), down from 75 million euros operating income in Q3 2021 
  • Average revenue per user: 4.63 euros ($4.55) 

Listener metrics 

  • Subscribers: 195 million, +13.4% y/y 
  • Ad-supported monthly active users: 273 million, +24.1% y/y 
  • Monthly active users: 456 million, +19.7% y/y 

This is a developing story.

Glenn Peoples