Spotify Technology reached a milestone of 300 million premium subscribers in the second quarter while growing revenue by 14% in the period compared with a year earlier.

The results

Spotify added seven million premium subscribers in the second quarter, bringing its total to 300 million and beating the company's prior guidance by one million. The increase came from across all of the company's regions, including North America, Latin America, Europe and other parts of the world.

The Swedish audio streamer's monthly active users grew by 12% year-over-year to 777 million, falling short of the company's prior guidance by one million. Overall, the company added 16 million users during the quarter.

The company's net income was 545 million euros, equivalent to about $627 million, or EUR2.61 a share. That is up from an EUR86 million loss from the same period last year.

Revenue was about EUR4.78 billion, up 14% from EUR4.19 billion in the same period last year. The company's gross margin hit a record of 33.4%.

The context

Spotify has been building out features to its offerings of music, podcasts and audiobooks. It recently launched a feature called Reserved, which saves two concert tickets for some artists' biggest fans to purchase before tickets go on general sale.

The company is rolling out "personal podcasts," which let listeners create artificial-intelligence-generated audio episodes based on their interests. It is also developing a new AI-powered tool that lets music fans make remixes and cover songs within the app.

The outlook

Spotify's share price was down about 15% so far this year as of Monday's close.

For the current quarter, the company forecast that monthly active users would grow to 788 million, adding about 11 million, while premium subscribers would increase to 305 million, adding roughly five million. It forecast revenue of EUR5 billion for the current quarter, and a gross margin of 32.9%.