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Spotify Passes 113M Paid Subscribers As Average Revenue Per User Decline Continues

Spotify grew to 248 million monthly average users in the last three months and beat analysts' expectations on paid Premium subscribers, reaching 113 million, the company reported in a Q3. Continue reading [https://www.hypebot.com/hypebot/2019/10/spotify-passes-113m-paid-subscribers-as-average-user-r

,   and  Bruce Houghton
Spotify newSpotify grew to 248 million monthly average users in the last three months and beat analysts' expectations on paid Premium subscribers, reaching 113 million, the company reported in a Q3 letter to shareholders Monday.That's a growth of 5 million subscribers in 3 months.Podcast listening was also up 39% since last quarter and that podcast engagement is driving user engagement and conversion, according to Spotify.A New CFOFollowing last quarter's announcement that Barry McCarthy will be retiring as CFO, effective January 15, 2020, at Spotify announced that Paul Vogel, the current head of FP&A, Treasury and Investor Relations, will step into the role. McCarthy will rejoin Spotify’s board of directors and remain involved with Spotify’s future growth and development. Revenue GrowthTotal revenue of $2220 million grew 28% Year over Year in Q3. Consolidated revenue modestly beat our expectations with Premium outperforming and Ad-Supported weaker than forecast. Premium revenue was up 29% Y/Y, while Ad-Supported revenue was 20% Y/Y.Declining Average Revenue Per UserThe average revenue per user (ARPU), a number watched closely by labels and artists, continued to decline. On the paid Premium side, average revenue per user Q3 was down 1% year on year. 75% of ARPU decline continues to be product mix, according to Spotify,  although geographic mix also plays a role. On the Ad-Supported side, revenue growth of 20% Y/Y underperformed expectations in Q3. Roughly 80% of the miss was related to self-inflicted implementation and integration of new sales software, according to the streamer.Quarterly ProfitSpotify posted an operating profit in Q3 of $69.26 million USD.“For the 8th consecutive quarter, free cash flow was positive. We continue to see exponential growth in podcast hours streamed (up approximately 39% Q/Q) and early indications that podcast engagement is driving a virtuous cycle of increased overall engagement and significantly increased conversion of free to paid users.

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