The world’s most popular streaming service, Spotify, posted bigger losses on Wednesday on rising costs, although second-quarter subscriber numbers beat expectations.
Between April and June, the Swedish giant suffered a net loss of 125 million euros ($126 million), compared to 20 million euros in the second quarter of 2021.
During the same period, the number of paid subscribers increased 14 percent to 188 million out of a total of 433 million including non-paying users.
The 19 percent increase in total users was the largest ever in the second quarter, the company said.
Analysts had expected a loss of 127 million euros ($128 million) and a rise in paying subscribers to 187 million, Bloomberg reported.
The rise in paying subscribers allayed fears that the rising cost of living would force consumers to cut back on non-essential expenses like entertainment.
Spotify’s operating loss was €194 million in the second quarter, compared to an operating profit of €12 million a year earlier.
Spotify attributed the losses to higher personnel costs after the company expanded its team and made new acquisitions as it expanded its reach into the world of podcasts.
Spotify ran into trouble earlier this year with a multi-year, $100 million deal with controversial star podcaster Joe Rogan.
At the end of the second quarter, Spotify listed 4.4 million podcasts on its platform, up 400,000 from the end of March.
The number of users engaged with podcasts grew “well into double digits” year-on-year and “podcast consumption rates per user continued to increase,” it said.
Spotify expects operating losses of 218 million euros in the third quarter due to unfavorable exchange rates.
The euro has fallen against the dollar in recent months, triggered by the war in Ukraine and increasing risks to the European Union economy, as well as a relatively slow rate hike by the ECB.
Spotify shares are up 16 percent in morning trade on the New York Stock Exchange.
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