Spotify returns to profit after smashing Q3 targets
Spotify delivered a return to profitability in the third quarter after user and subscriber numbers beat expectations and revenues grew ahead of guidance.
SPOTIFY TECH
$477.50
11:09 14/11/24
The audio streaming service delivered an operating income of €32m in the three months to 30 September, compared with a loss of $228m in the third quarter of 2022, and a loss of €247m in the second quarter of 2023. This was the company's first quarterly profit since 2021.
Monthly active users grew 26% to 574m, while subscribers increased 16% to 226m, with both figures coming in 2m ahead of guidance.
Revenues were up 11% year-on-year to €3.4bn, helped by subscriber gains and recent price hikes.
Gross margin also finished above guidance at 26.4%, up from 24.1% at the half-year stage, as operating expenses declined 13% year-on-year as a result of lower marketing expenses and a fall in personnel and related costs.
Looking ahead, the company is guiding to total monthly active users of 601m in the fourth quarter and subscriber numbers rising to 235m.
Spotify futures were performing well in pre-market trade, up 5.3% at $162.80 by 0848 ET.