Spotify Technology SA, the Swedish audio streaming platform, beat analyst expectations in its second-quarter results with its total active users rising 27% to 551 million.
The company cited strong growth in all regions and among younger Gen Z listeners.
— Premium subscribers rose 17% to 220 million, the company said Tuesday in a statement. That was ahead of the 217.1 million average of analysts estimates compiled by Bloomberg. Revenue, at €3.18 billion, was slightly below expectations.
— The company’s adjusted operating loss was €112 million, beating analysts’ estimates for a loss of €127.4 million.
— The company forecast 572 million active users for its third quarter, 224 million of them premium subscribers. It forecast sales of €3.3 billion for the period.
Key Insights
— On Monday, the streaming service raised prices in the US for the first time since its launch. The standard premium plan now costs $10.99, the same price as Spotify’s primary competitors, Amazon Music and Apple Music.
— Spotify cut 2% of staff in June, primarily in its podcasting division, and pivoted its strategy away from exclusive releases to wide distribution. The company did so to focus on growing its advertising business and reaching more listeners.
— The company has additionally looked to cut costs by planning to introduce more expensive subscription tiers and reducing its real estate footprint.
Market Reaction
— Shares rose 3.7% in trading before markets opened in New York. They were down 4.7% on Monday, though they have more than doubled in the year to date.
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