We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can Higher ARPU Keep Spotify's Premium Revenue Growing?
Read MoreHide Full Article
Key Takeaways
Spotify's Premium revenues rose 15% year over year to EUR 4.33B, supported by subscriber gains.
Subscribers grew 9%, while Premium ARPU advanced 7% to EUR 4.89, mainly driven by price increases.
Ad-Supported revenues rose 1% as podcast sponsorships improved and automated sales channels led growth.
Spotify’s (SPOT - Free Report) Premium revenues increased 15% year over year to €4.33 billion, or 16% on a constant-currency basis, supported by subscriber and monetization gains. Subscribers grew 9%, while Premium ARPU advanced 7% to €4.89. On a constant-currency basis, ARPU rose 7.4%, with price increases providing the main lift and product and market mix limiting some of the benefit.
Higher pricing is translating into stronger premium monetization without interrupting subscriber expansion. Revenue growth is thus being supported by a larger paying audience and increased revenue per subscriber. Continued pricing benefits could sustain momentum, although the mix of products and markets remains an offset to watch.
Ad-Supported revenues grew 1% year over year, or 3% at constant currency. Music advertising benefited from more impressions sold, but softer pricing partly reduced that contribution. Podcasting improved through stronger sponsorship activity across Spotify’s Owned and Licensed portfolio. Automated sales channels remained the largest drivers of advertising growth, underscoring their importance as the operation evolves.
How Do Two Streaming Peers Compare?
Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) remain peers in audio streaming. Apple benefits from tight integration between its music service and device ecosystem, while Amazon can connect streaming with Prime memberships and smart speakers. Spotify, however, relies more directly on subscriber growth, ARPU gains and advertising execution because audio anchors its business. For investors, Apple represents an ecosystem-led model, whereas Amazon demonstrates the appeal of bundled services. Spotify’s improving monetization indicates that its focused strategy remains competitive.
View the Zacks #1 Rank List
Image: Bigstock
Can Higher ARPU Keep Spotify's Premium Revenue Growing?
Key Takeaways
Spotify’s (SPOT - Free Report) Premium revenues increased 15% year over year to €4.33 billion, or 16% on a constant-currency basis, supported by subscriber and monetization gains. Subscribers grew 9%, while Premium ARPU advanced 7% to €4.89. On a constant-currency basis, ARPU rose 7.4%, with price increases providing the main lift and product and market mix limiting some of the benefit.
Higher pricing is translating into stronger premium monetization without interrupting subscriber expansion. Revenue growth is thus being supported by a larger paying audience and increased revenue per subscriber. Continued pricing benefits could sustain momentum, although the mix of products and markets remains an offset to watch.
Spotify Technology Revenue (TTM)
Spotify Technology revenue-ttm | Spotify Technology Quote
Advertising Shows Measured Progress
Ad-Supported revenues grew 1% year over year, or 3% at constant currency. Music advertising benefited from more impressions sold, but softer pricing partly reduced that contribution. Podcasting improved through stronger sponsorship activity across Spotify’s Owned and Licensed portfolio. Automated sales channels remained the largest drivers of advertising growth, underscoring their importance as the operation evolves.
How Do Two Streaming Peers Compare?
Apple (AAPL - Free Report) and Amazon (AMZN - Free Report) remain peers in audio streaming. Apple benefits from tight integration between its music service and device ecosystem, while Amazon can connect streaming with Prime memberships and smart speakers. Spotify, however, relies more directly on subscriber growth, ARPU gains and advertising execution because audio anchors its business. For investors, Apple represents an ecosystem-led model, whereas Amazon demonstrates the appeal of bundled services. Spotify’s improving monetization indicates that its focused strategy remains competitive.
SPOT and AAPL currently carry a Zacks Rank #3 (Hold) each. AMZN carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.