Spotify Quarterly Revenue Surpasses Higher User Count and Ad Bounce

STOCKHOLM, July 28 (Reuters) – Spotify Technology SA (SPOT.N) beat Wall Street estimates for second-quarter revenue on Wednesday as the music streaming company reported a 20% increase in the number of paying subscribers for its premium service, driven by demand in Europe and North America.

The top portion of the company’s revenue and premium subscribers forecast for the current quarter was also ahead of expectations.

Spotify forecasts a turnover of 2.31 to 2.51 billion euros and 170 to 174 million premium subscribers. Analysts on average expected a turnover of 2.39 billion euros and 170.4 million subscribers.

COVID-19 continued to weigh on its performance in several markets, but revenue from its advertising business, which was hit last year due to the pandemic, increased 110% to € 275 million .

Spotify has also invested heavily in its podcast business to rival Apple’s (AAPL.O) and in April launched a paid subscription platform for podcasters in the United States.

The company currently has 2.9 million podcasts on its platform, and podcasts’ share of overall consumption hours reached an all-time high in the quarter.

Its podcasts from figures such as Joe Rogan and Bill Simmons continue to attract more and more users.

Revenue rose to 2.33 billion euros ($ 2.75 billion) for the quarter, from 2.15 billion a year earlier, above the 2.29 billion expected by analysts, the data showed. IBES from Refinitiv.

Premium subscribers, which account for the bulk of the company’s revenue, reached 165 million, matching analysts’ expectations.

The total number of monthly active users increased 22% to 365 million.

The company reported a net loss of 20 million euros, or 19 cents per share, improving from a loss of 356 million euros or 1.91 euros per share a year earlier and beating the loss of 37 cents euros expected by analysts.

Spotify shares rose 3.5% in pre-market trading.

($ 1 = 0.8460 euros)

Reporting by Supantha Mukherjee, European correspondent for technology and telecommunications, based in Stockholm, edited by Helena Soderpalm and Jason Neely

Our Standards: Thomson Reuters Trust Principles.