Spotify’s second quarter as a public company shows that it has increased its paid subscriptions by 40 percent, but it lost $458 million in revenue. According to reports, Spotify now has 83 million paid subscribers, which is an increase from its 75 million from last quarter. The streaming music service now has 180 million total users, coming in with a 5.9 percent quarter-over-quarter growth rate.
As a comparison, Apple Music has 40 million subscribers, though there are rumors it might now possibly have more in the U.S. than Spotify. Spotify says it has 31 percent of its subscribers (25 million) in North America.
Despite that good news, there are financial issues for the company, which had €1.27 billion ($1.49 billion) in revenue, up 26 percent year over year and in line with estimates. However, it missed big on earnings per share (EPS), where it saw a loss of -€2.20 compared to estimates of -€0.68. In addition, Spotify saw a net loss of €394 million and operating loss of €91 million this quarter, showing it’s still a long way from turning a profit. Spotify shares were down about 0.8 percent in pre-trading hours.
Spotify’s average revenue per user also dropped 12 percent this quarter, mainly due to promotions like a bundled subscription with Hulu to attract more subscribers. The subscription plan, Spotify Premium, with Hulu, allowed subscribers to enjoy ad-free music on Spotify Premium, as well as the more than 75,000 current and classic hit television shows and movies on Hulu’s ad-supported service — all for a single $12.99-a-month subscription plan.
In addition, it was announced in May that Mighty, the MP3 player that gives people access to Spotify, is selling for a discounted rate for a limited time. And some Spotify customers reported receiving offers within the app for a device that would be part of the $12.99 monthly subscription. The subscription price, totaling $155 annually, would cover both the music service and the hardware.