Spotify Adds More Subscribers, Revenue Grows Thanks to Ad Bounce
STOCKHOLM, Oct.27 (Reuters) – Spotify Technology SA (SPOT.N) topped Wall Street estimates for third-quarter revenue on Wednesday, as the music streaming company announced a 19% increase in the number of paying subscribers for its premium service, driven by demand in Europe and North America.
Premium subscribers, which make up the bulk of the company’s revenue, hit 172 million, narrowly exceeding analysts’ expectations of 171.7 million.
The total number of monthly active users increased 19% to 381 million.
Spotify is gaining subscriptions and serving advertisements to non-paying members. Advertising revenue, which fell at the height of the pandemic, jumped 75% to 323 million euros ($ 376 million), and the company plans to hire hundreds of people to further increase ad sales .
Total revenue rose 27% to 2.50 billion euros, exceeding the 2.45 billion expected by analysts, according to IBES data from Refinitiv.
Around 40% of Spotify’s premium subscribers are based in Europe and 29% in the United States.
The company has also invested heavily in its podcast business to rival Apple’s (AAPL.O) and in April launched a paid subscription platform for podcasters in the United States.
Spotify currently has 3.2 million podcasts on its platform, up from 2.9 million at the end of the second quarter.
“While we have been relentless in our quest to be the world’s largest audio platform, we are only just getting started and just getting started,” CEO Daniel Ek said in a statement. .
The higher part of the company’s forecast for the current quarter for revenue and premium subscribers also beat estimates.
Spotify forecasts fourth-quarter revenue of 2.54-268 billion euros and 177-181 million premium subscribers. Analysts expect on average a turnover of 2.62 billion euros and 180 million subscribers.
The company posted a net profit of 2 million euros compared to a loss of 101 million euros a year earlier.
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Reporting by Supantha Mukherjee in Stockholm Editing by Johan Ahlander and Mark Potter
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