Spotify delivers unexpected Q3 profit following revenue growth

The music streaming platform posted net profit of €241.0m for the three months ended 30 September, compared with €43.0m for the comparable year-ago period, which was ahead of the loss that analysts had anticipated.

Revenue increased by 28% to €1.73bn, edging past the €1.72bn expected by analysts polled by FactSet.

The rise in turnover came as total monthly active users leapt by 30% to 248.0m, while the number of premium subscribers jumped by 31% to 113.0m.

Developing regions saw a significant increase in user growth, with the rate of increase in the number of Latin American users accelerating for the 2nd consecutive quarter and India outperforming forecasts by 30% following a broad-based marketing campaign.

Spotify's Family Plan and Student Plan offerings drove subscriber growth following the introduction of new features, including parental controls to filter explicit content.

The company remained confident in its dominance over rival streaming platforms, pointing out that public data demonstrated it is adding roughly twice as many subscribers per month than Apple Music.

Its own data also revealed that Spotify added more users on an absolute basis than Amazon Music, whose users were less likely to subscribe to a premium package.

The New York-listed company also announced that chief financial officer Barry McCarthy will step down on January 15 and be replaced by Paul Vogel, who is currently serving as vice president of financial planning & analysis, treasury and investor relations.

Spotify reiterated its guidance for full-year revenues in a range of €1.74bn to €1.94bn and for an operating loss of between €31m and €131m, although the company raised its projections for monthly active users to between 255.0m and 270.0m.

Spotify shares stood at $137.01 at 1427 GMT, 13.88% higher than at the close of trading on Friday.