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Spotify posted a document quarterly revenue on Tuesday that barely exceeded analyst expectations, sending shares up greater than 14% in premarket buying and selling.
The Swedish audio streaming big tried to chop prices final yr by layoffs and cuts to its advertising price range, whereas making an attempt to increase its consumer base by promotions and new investments in podcasts.
Within the second quarter of 2024, the variety of paying Spotify subscribers rose to 246 million, barely above expectations.
“It actually comes right down to the variety of subscription affords we have now now. We’re going from one-size-fits-all to one thing for everybody,” CEO Daniel Ek mentioned in an interview with Reuters, citing the corporate’s numerous plans for college kids and shared households.
Revenue rose 45% from a yr earlier to 1.11 billion euros ($1.21 billion), barely above analysts’ expectations of 1.07 billion euros. In accordance with IBES information from LSEG, earnings per share of 1.33 euros additionally exceeded expectations of 1.06 euros.
Gross sales rose 20% to three.81 billion euros for the second quarter of 2024, fractionally beneath analyst estimates of three.82 billion euros. The corporate didn’t meet its personal month-to-month lively customers (MAUs) goal. Spotify beforehand mentioned it aimed to achieve 631 million month-to-month lively customers (MAUs), however solely reached 626 million this quarter.
“In brief, it was an excellent quarter for them,” mentioned Simon Dyson, an analyst at Omdia, a consultancy centered on media, telecoms and communications.
“They missed their MAU, however inside their steerage they’re nonetheless assured this quantity will enhance, and in the event that they keep the course we’ll all neglect they missed it this quarter.”
The corporate mentioned it had seen consumer progress throughout all areas, however had fallen in need of its MAU goal resulting from “steady recalibration” of selling actions.
“It is undoubtedly one thing we take very severely once we miss our personal predictions,” Ek mentioned. “For me it is a matter of when, not if. We’ll return to sturdy MAU progress, I’ve a very good feeling about it.”
Spotify’s gross revenue margin elevated to 29.2% from 27.6% within the earlier quarter.
