Spotify's shares declined modestly by 0.8% post-earnings, reflecting investor caution around the company’s Q3 user metrics and the deliberate introduction of friction in its free service in select emerging markets, which may slow near-term MAU growth despite ongoing revenue acceleration.
- Revenue grew 15% year-over-year on a constant currency basis, slightly accelerating from 14% in Q1.
- Gross margin reached a new high of 33.4%, supported by disciplined OpEx and operating margin improvement.
- Subscribers surpassed 300 million, beating guidance, with increased engagement measured by active days per global subscriber.
- Spotify introduced higher friction in free tiers within emerging markets to boost conversion and monetization, expected to impact Q3 MAU negatively in the near term.
- Advertiser metrics improved significantly: active advertisers grew 60% year-over-year, and automated channels now represent nearly 40% of ad-supported revenue, up from 30% in Q1.
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