Net income swings to €545 million from year-earlier loss
The Swedish audio streamer reported net income of €545 million, equivalent to about $627 million, or €2.61 a share, reversing a loss of €86 million in the same period last year. Revenue climbed 14% to approximately €4.78 billion from €4.19 billion a year earlier, and gross margin reached a record 33.4%.
The company added seven million premium subscribers during the quarter, bringing its total to 300 million and exceeding its prior guidance by one million. The increase came from all regions, including North America, Latin America, Europe and other parts of the world.
Monthly active users grew 12% year over year to 777 million, falling short of the company’s prior guidance by one million. Overall, Spotify added 16 million monthly active users during the quarter.
Spotify has been building out features beyond music streaming. It recently launched a feature called Reserved, which saves two concert tickets for some artists’ biggest fans to purchase before tickets go on general sale. The company is rolling out “personal podcasts,” which let listeners create artificial-intelligence-generated audio episodes based on their interests. It is also developing a new AI-powered tool that lets music fans make remixes and cover songs within the app.
Spotify’s share price was down about 15% so far this year as of Monday’s close.
For the current quarter, the company forecast that monthly active users would grow to 788 million, adding about 11 million, while premium subscribers would increase to 305 million, adding roughly five million. It forecast revenue of €5 billion for the current quarter and a gross margin of 32.9%.