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Spotify Adds More Users Than Expected, Posts Profit
Spotify Adds More Users Than Expected, Warding Off Competition
28 Oct 2019, 06:05 PM IST
(Bloomberg) -- Spotify Technology SA reported slightly higher subscriber growth than analysts expected, reaching 113 million paying users in the latest quarter, in a sign it’s keeping competitors in check.
- Analysts had projected about 111.2 million premium subscribers in the third quarter, with Spotify forecasting a range of 110 million to 114 million. It posted earnings of 36 euro cents a share. Analysts had forecast an 18-cent adjusted loss per share.
Key Insights
- Spotify is spending heavily to keep its lead over Apple Inc. and Amazon.com Inc. in the paid music-streaming industry. Recent data from Sensor Tower suggested its app download growth in the U.S. has been declining.
- Total monthly active users -- a figure that includes people using the free, ad-supported version -- were 248 million, compared to analyst estimates of around 243 million in a Bloomberg MODL survey.
- Spotify is going after global users more aggressively. The company’s inroads in countries such as Thailand, Japan and Indonesia have been promising, according to Raymond James research.
- Before Monday, Spotify had reported a profit in just one quarter as a public company. It’s trying to boost margins by selling tools to artists and music companies in what it calls a “two-sided marketplace.” Last week, the company said it was testing a tool by which artists could pay to promote a new release.
Market Reaction
- Spotify shares rose 1.9% to $123 in premarket trading. The stock lost more than a fifth of its value between early August and the end of last week.
Get More
- Spotify said Chief Financial Officer Barry McCarthy would retire on Jan. 15, replaced by Paul Vogel, who is currently a vice president at the company.
- Read the statement.
--With assistance from Kamaron Leach.
To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.net
To contact the editors responsible for this story: Thomas Pfeiffer at tpfeiffer3@bloomberg.net, John J. Edwards III
©2019 Bloomberg L.P.
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