Spotify posts loss, blames poor advertising execution

Spotify is adding subscribers but losing money, with COO Daniel Ek blaming an advertising drop on poor execution. The Swedish music streaming platform posted a net loss of A$153 million for the second quarter, despite gaining users across all paid and ad-supported tiers.

Spotify’s June quarter revenue jumped 10% year-on-year, to A$7.43 billion (4.19 billion euro). This was below Wall Street estimates of A$7.56 billion. The company’s net loss of A$153 million was also well below expectations of a A$692 million profit, and notably down from its A$400 million net income in the same quarter last year.

The company’s operating expenses increased by 8%, year-on-year, which it put down to higher payroll and marketing costs. Advertising-supported revenues dropped by 1%, to A$803 million. This is despite more than 60% of its user base being on the ad-supported tier – a global audience of 420 million listeners.