Spotify said today it had recovered from a coronavirus-related damp start to the second quarter, beating Wall Street expectations to report 138m in paid users.
Subscribers to its Premium service, which accounts for most of the company’s revenue, were up 27 per cent from a year earlier.
Analyst had on average forecast the company to have 136.4m paid subscribers in the three months to the end of June, according to IBES data from Refinitiv.
Revenue rose 13 per cent to €1.89bn, up from from 1.67bn euros a year earlier.
However its losses spiked dramatically, rising to €167bn up from €17bn at the end of March this year as costs jumped 48 per cent.
Spotify largely put this down to a boom in its share price in tandem with a higher than expected rise in social charges, referring to the taxes it pays when employees exercise stock options or other benefits.
Spotfiy’s share price has risen approximately 80 per cent since the start of 2020, but fell three per cent afternoon in pre-market trading.
Its total monthly active users — which includes those on its free subscriptions — grew 29 per cent year-on-year to 299m, coming in at the top of Spotify’s previous guidance range.
Spotify said it had been a rocky start to the quarter with the economic impact of coronavirus prompting slower than expected growth in April and May, with lower rates of sign-ups, an increase in churn, and increases in payment failures from Premium users.
However a significant rebound in June with stronger than expected growth in North America reversed the Swedish music streaming firm’s fortunes.
“Our strength in North America and other areas more than offset the slow start to the quarter,” said Spotify in a statement to investors.
“Additionally, we believe the improved momentum we saw in the back half of the quarter has continued into [the third quarter] and we expect to hit our full-year targets.”
Spotify added that global consumption hours — referring to the amount of time spent by users on the platform — have recovered to pre-Covid levels across all regions, with the exception of Latin America.