Spotify paying users grow by 7 million in Q3

This is according to Spotify’s latest earnings report, published this week. Spotify has now added 15m paying users this year, exceeding its expectations by a million.

The platform’s monthly active users (MAUs), which include paying users and ad-supported (freemium) users, reached 456m, representing growth of 23m from the previous quarter. The company had predicted a total of 450m users at the close of Q3.

The platform said the growth in MAUs was due to promotional campaign results across all regions, and singled out India for better than expected intake.

There was slightly less good news for record labels on the average revenue per unit (ARPU) front: Premium monthly global ARPU at Spotify grew 7% year-over-year (YoY) to €4.63 – but that was down 1% at constant currency.

Spotify returned €3.03bn ($3.06bn) in quarterly revenues in Q3, a 12% jump at YoY at constant currency.

Paying subscribers accounted for €2.65bn showing a 13% rise compared to the previous year, while ad-supported revenues reached €385m, up 3% YoY, growing slower than revenue from premium users. The growth was driven by podcasts.

Spotify posted a gross profit of €750m, with a €228m operating loss. The growth in expenses was due to increased personnel costs following the platform’s global ad sales team expansion, platform investment and acquisitions as well as higher advertising costs for growth initiatives.

The earnings call also raised some more news, sparked by a question about Apple Music and YouTube’s decision to increase the price of its basic subscription. However, Ek said that Spotify has already “done more than 46 price increases in markets around the world” in the last two years, but agreed that an increase in the US is on the to-do list.

“It is one of the things that we would like to do, and this is a conversation we will have in light of these recent developments with our label partners,” said Ek, later returning to the topic. “If you think in light of our competitors raising prices, that obviously gives us more confidence going into it, too.”

In the next quarter which will end on 31 December, Spotify expects its premium subscribers to reach 202 million, adding seven million more paying users. While MAUs are forecasted at 479 million, another 23 million users to its tally.

View and download the full report here.