Spotify Earnings: When Good Is Not Good Enough
Spotify Technology released better-than-expected third-quarter financial results before the markets opened on Thursday.
Spotify Technology S.A. (NYSE: SPOT) released its third-quarter financial results before the markets opened on Thursday. The company said that it had $0.27 in earnings per share (EPS) on $1.57 billion in revenue, which compares with consensus estimates that called for a net loss of $0.41 per share and revenue of $1.51 billion. Note that the company originally reported its results its euros.
During the quarter, monthly active users (MAUs) grew 28% year over year to 191 million. Growth in Spotify’s emerging regions of Latin America and Rest of World continues to outpace growth in its more established markets.
Ad-supported MAUs totaled 109 million at the end of the quarter, up 20% from last year.
Premium subscribers totaled 87 million at the end of the quarter, up 40%.
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Looking ahead to the fourth quarter, the company expects to see total MAUs in the range of 199 million to 206 million, up 24% to 29% year over year, and roughly 93 million to 96 million in total premium subscribers.
Consensus estimates for the fourth quarter call for a net loss of $0.47 per share and $1.51 billion in revenue.
Spotify detailed in the report:
Ad-Supported MAUs totaled 109 million at the end of the quarter, up 20% Y/Y. Earlier this year we began rolling out a new user interface for our Ad-Supported tier of service, the first major revision since our mobile product was introduced in 2014. We expect this new user interface to drive improvements in engagement and retention.
Shares of Spotify closed Wednesday at $149.69, with a consensus analyst price target of $206.09 and a 52-week trading range of $131.01 to $198.99. Following the announcement, the stock was down 8% at $137.95 in early trading indications Thursday.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
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