Spotify on the Pixel 4 XLSource: Joe Maring / Android Central

What you need to know

  • Spotify has announced its financial results for the third quarter of 2020.
  • The company's monthly active users count reached 320 million during the July-September period.
  • It also now has 144 million premium subscribers.

Spotify today posted its financial results for the third quarter of the year. The company reported total revenue of €1.98 billion ($2.32 billion) during the July-September period, an increase of 14% compared to the same period a year earlier. Revenue per user, however, dropped 10%, leading to an operating loss of €101 million ($118 million).

In its Q3 2020 results, Spotify stated:

The business performed at a high level in Q3. Highlights included strong MAU and subscriber growth, a recovery in global consumption hours, record low churn below 4%, better than expected Gross Margin, and Free Cash Flow of €103 million. Headwinds included negative effects from FX movements which slowed revenue growth by 500 bps on a constant currency basis. Revenue was slightly better than expected excluding the impact of FX. Notably, some of our more mature regions exhibited accelerating user growth, our advertising business returned to growth, and new market launches in Russia and 12 surrounding markets unlocked significant pent-up demand, adding a helpful accelerant to our results.

Spotify now has a total of 320 monthly active users around the world, a growth of 29% compared to Q3 2019. It says the growth in the number of monthly active users was driven by successful marketing campaigns in India and its launch in the Russian market. The service also witnessed a 27% YoY growth in the number of premium subscribers. It now has 144 million paying users, up from 170 million in the previous quarter.

VPN Deals: Lifetime license for $16, monthly plans at $1 & more

Spotify User Growth Q3Source: Spotify

Thanks to strong user growth, Spotify has extended its lead as the world's leading music streaming service. While Amazon Music announced earlier this year that it had over 55 million users, Apple hasn't revealed its subscriber count since Apple Music surpassed 60 million paying subscribers in June last year.

Spotify expects to add around 25 million users and 10 million premium subscribers in the fourth quarter of the year.