![]() ![]() ![]() Its adjusted ad-supported margin is at +5.7%.īut let’s be honest, Spotify’s overall gross margin is not as good as expected. But the company has made some write-off charges on content assets and contract termination this quarter. The gross margin on free users is currently negative, at -5.7%. When it comes to gross margin, Spotify currently generates 28.4% in gross margins for premium users. This is an important metric as it is much easier to monetize paid users than ad-supported users. That ratio has been going down over time (but remember that the total user base is growing). Spotify’s premium subscribers now represent 39.9% of its overall user base. Of course, there is some porosity between these two buckets as some users start with a free account and then become paid subscribers while others stop paying for a premium subscription for one reason or another. In other words, Spotify is growing nicely, but the company is attracting more free users than paid users. Spotify has never added as many users in a single quarter - 36 million new active users. That means that 331 million users are currently using the service every month with a free, ad-supported account. Overall, Spotify now has 551 million monthly active users. There are currently 220 million people who pay for a Spotify subscription around the world - that number is up 17% year over year. Spotify just reported its second-quarter earnings and the two most impressive metrics are the number of subscribers and the total number of Spotify users.
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