Spotify appears to have defied the subscriber downturn seen by many tech firms, posting a 14 per cent jump in paying subscribers in its second-quarter results.
The streaming giant posted a 23 per cent boost in revenue to €2.9bn, defying analyst expectations.
Premium subscribers, which is still the majority of its revenue, rose to 188 million, one million ahead of Wall Street guidance.
Spotify CEO Daniel Ek said the firm are not seeing any change in users or subscriber outlook despite economic downturns.
Like other US giants, Spotify said it would proactively slowing its hiring headcount growth by 25 per cent. It said it would also look at marketing activity moving forward.
Commenting on why the move is happening alongside positive results, Ek told the earnings call: “Only the paranoid survive.”
Ek also said there was immense opportunity in the advertising space, especially by expanding the podcast and wider audio marketplace.
He said that the Spotify team has been focused on growing the monthly active user base, but now the focus will be focused on shifting these into paying customers.
Ek predicted there will be an acceleration in subscribers in a year’s time, but couldn’t predict how it would exactly get there.
Tech, Media & Telco analyst PP Foresight Paolo Pescatore told City A.M. the latest results reinforce its position as the market leader.
“It was a reasonably good quarter against a backdrop of a challenging and uncertain political and economic environment.
This is encouraging and underlines the stickiness of music as a key service compared to others such as video. The latter has too many services chasing too few dollars.”
Earlier this year, investment bank Raymond James warned investors not to tar music streaming giants with the same brush as video streamers, like Netflix and Disney+.
Following the ongoing slump of Netflix subscribers, analyst Andrew Marok said: “So what we see in the competitive environment for streaming music is a lot more stable environment than you see, for instance, in streaming video, where content owners are increasingly taking ownership of their content, walling it off, going directly to consumers.”
Spotify shares are up six per cent in pre-market trading.