At the end of October, Spotify reported its earnings for Q3 2021. At first glance, Spotify — a $45 billion company — appears to be growing at a healthy pace.
Let’s look at Spotify by the numbers.
Financials
Revenue is the value of all sales of goods and services recognized by a company in a period. Gross margins are a company's sales minus its cost of goods sold (COGS) expressed as a percentage of sales.
- Revenue of €2,501 million grew 27% year-over-year in Q3
- Premium Revenue grew 22% year-over-year to €2,178 million in Q3
- Ad-Supported Revenue grew 75% year-over-year to €323 million in Q3
- Gross Margin finished at 26.7% in Q3
- Premium Gross Margin was 29.1% in Q3
Operations
MAUs,considered a key metric for modern software companies, track the number of users engaging a service within the past 30 days.
- Total MAUs grew 19% year-over-year to 381 million in Q3
- Among MAUs that engaged with podcasts in Q3, consumption grew 20% year-over-year on a per-user basis
Stock Price
While Spotify's year-over-year user and financial results look impressive, Spotify's stock price has taken a beating over the past 12 months. From a high of $364 in February 2021, Spotify's stock price reached a low of $205 in August 2021.
Forward Guidance
Spotify gave the following guidance for Q4 2021.
- Total MAUs: 400-407 million
- Total Premium Subscribers: 177-181 million
- Total Revenue: €2.54-€2.68 billion
- Gross Margin: 25.1-26.1%
- Operating Profit/Loss: €(152)-€(72) million
