Spotify has reported better-than-expected revenue for the second quarter of 2022, aided by a 14% jump in paying subscribers, and has made positive forecasts for the current quarter.
The music streaming platform saw its monthly active users increase to 433 million through the period, outperforming expectations of 428 million. The company aims to reach 450 million monthly active users in the third quarter.
Premium subscribers, which are the main source of the company’s revenue, rose to 188 million, beating analyst predictions of 187 million subscribers. Revenue increased by 23% to 2.9 billion euros ($2.94 billion), with analysts having projected revenue of 2.8 billion euros.
The company’s shares rose 5% during premarket trading in response to the positive news.
Investors had been worried that falling advertising revenues would have an impact on the company’s performance, but the relatively low dependence of Spotify on the revenue stream has seen the firm negate the threat.
“While we do expect advertising to become a much bigger part of our business over the long term, it’s still a reasonably small amount of our revenue at only 13%,” said Spotify CFO Paul Vogel.
Meanwhile the firm has decided to abandon Car Thing, the dashboard accessory launched by Spotify in April. Despite being discounted by almost 50% of its launch price, the device is failing to sell enough units to remain a profitable prospect.
Spotify CEO Daniel Ek confirmed the decision to discontinue Car Thing in an interview.