Spotify posts better than expected Q2 loss, MAU growth falls short of guidance

Streaming giant Spotify posted a £24.1m second-quarter loss on Wednesday and revealed it had failed to hit its own growth targets.

However, Spotify's loss of $0.23 per share was better than expected on the Street, with analysts on average estimating to see a loss of $0.52 per share.

The Stockholm-based firm also posted quarterly revenues of $2.81bn, which also beat expectations for a print of $2.75bn.

Spotify said that the three of its major metrics - subscriber growth, gross margin and operating income - had all performed better than it had initially expected throughout the quarter. But the firm did fall short of monthly active user guidance, with a growth rate of 22% year-on-year to 365.0m.

"The quarter was led by improving ARPU, decreased churn, a return to per-user consumption growth, and significant advertising strength. We did see a second quarter of greater MAU variability mainly due to ongoing Covid-19 headwinds and a temporary issue related to user intake on a third-party platform. However, trends improved in the back half of the quarter," said Spotify.

"Although we continue to face near-term uncertainty with respect to Covid-19, we remain confident in the underlying health of our user funnel, and our existing user retention activity remains consistent with historical trends."

As of 1540 BST, Spotify shares were down 9.15% at $215.25 each.