Spotify on Wednesday beat Wall Street estimates for third-quarter revenue, as the music streaming company reported a 19% jump in paying subscribers for its premium service, driven by demand in Europe and America. North. Premium subscribers, which account for most of the company’s revenue, reached 172 million, narrowly beating analysts’ expectations of 171.7 million.
The total number of monthly active users increased by 19% to 381 million.
Spotify earns subscriptions and by showing ads to non-paying members. Ads revenue, which plummeted at the height of the pandemic, jumped 75% to 323 million euros (around Rs 2,810 crore), and the company plans to hire hundreds of staff to further increase advertising sales.
Total revenue rose 27% to 2.50 billion euros (around Rs 21,760 crore), beating 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, 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’ve been relentless in our quest to become the world’s largest audio platform, it’s still early days and we’re just getting started,” chief executive Daniel Ek said in a statement.
The upper end of the company’s current quarter guidance for revenue and premium subscribers also beat estimates.
Spotify forecasts fourth-quarter revenue of €2.54 billion (approx. Rs. 22,110 crore) – €2.68 billion (approx. Rs. 23,330 crore) and €177-181 million premium subscribers. Analysts on average expect revenue of 2.62 billion euros (around Rs 22,810 crore) and 180 million subscribers.
The company reported a net profit of 2 million euros (about 17 crore rupees) against a loss of 101 million euros (about 880 crore rupees) a year earlier.
© Thomson Reuters 2021