Spotify increased its subscriber base to 226 million during the third quarter of 2023.
Premium subscribers increased by six million on the prior quarter, which represents growth of 3% quarter-on-quarter. That compares to quarterly growth of 10m (5%) in Q2.
At this point, subscribers have grown 16% year-on-year.
During Q3, there was outperformance against the guidance in all markets, led by North America and Latin America.
Spotify will be encouraged by the apparent lack of subscriber churn following price increases. The streaming giant noted that there was “better than expected gross intake in markets that saw price increases”.
Total monthly active users increased by 26% (118m) year-on-year to 574m. The quarterly increase of 4% represents a further 23m subscribers added during the three months (ahead of the guidance by Spotify).
With 361m users, the ad-supported service is growing at a faster rate than premium: up 32% year-on-year and 5% quarter-on-quarter.
Total revenue increased by 17% year-on-year on a constant currency basis to €3.4 billion. Operating income was €32 million compared to operating losses in prior quarters this year.
Developments in the quarter included expanding its AI DJ to 50 more markets and the addition of a library of 150,000 audiobooks for premium subscribers.
In its letter to shareholders, Spotify described the quarterly results as “strong”.
“Overall, we are pleased with our performance in Q3, and view the business as well positioned to drive continued progress towards delivering against our Investor Day goals.”
For Q4, the outlook is for Spotify to add a further 27m monthly active users to reach 601m. The company expects to add nine million new subscribers to reach 235m.
Total revenue is forecast to hit €3.7bn in Q4.