Spotify grew subscribers 31% in Q2 2019, extending its lead over Apple Music

Spotify today reported it added 8 million new subscribers in the most recent quarter as it widened its lead over rival Apple Music.

The Swedish music streaming leader said in its Q2 earnings report that it now has a total of 108 million premium subscribers, up 31% from the same period one year ago.

Apple disclosed in June that its streaming service has 60 million subscribers, a figure that includes people in the free three-month trial period. Apple had previously said it had 50 million paid subscribers in January, not counting free trials.

Bottom line: While Spotify has added a total of 12 million subscribers so far in 2019, Apple Music has added fewer than 10 million.

The two companies have been locked in a fierce battle since Apple launched its streaming service four years ago. Apple’s service grew quickly, thanks to its default position on the company’s iPhones. Meanwhile, Spotify has filed an antitrust complaint in Europe, accusing Apple of abusing the power of its App Store, a move that further increased tensions between the two companies.

Overall, Spotify reported Q2 revenue that exceeded analyst expectations, though its subscriber number failed to hit the high end of its guidance. Spotify reported earnings before the stock market opened, and that slight subscriber miss sent its stock down 2.04% to $152.10 per share in premarket trading.

The company’s revenue for Q2 was $1.86 billion, up 31% from the same period one year ago, beating analyst estimates of $1.83 billion.

Spotify posted a loss of $84 million for Q2, down from $158 million in Q1 and $439 million the previous year.

Total monthly active users, which includes its free ad-supported tier, grew 29% in Q2 to 232 million, from 180 million in Q2 2018.

The company attributed its growth in part to the expansion of its podcasting offerings.

While many of those numbers appeared solid, Spotify executives acknowledged some disappointment with their subscriber numbers.

The company had offered guidance of 107 million to 110 million subscribers for the quarter; so the 108 million number was below the mid-point. Spotify attributed this shortfall to a weakness in its plan targeting students.

“As we have discussed previously, our goal is to perform at roughly the 70th percentile of our guidance range, and we missed on subs,” the company said in its earnings release. “That’s on us. The good news is that the shortfall was execution-related, rather than softness in the business, and we expect to make up the lost ground before year-end.”

For the rest of 2019, the company is forecasting subscriber numbers will rise to between 110 million and 114 million in Q3 and 120 million and 125 million in Q4.