By Supantha Mukherjee and Kenneth Li.
However, the company’s quarterly revenue fell short of analyst estimates, mainly affected by a 21% drop in ad-supported revenue as the spread of the pandemic kept advertisers at bay.
The Swedish company’s shares, which have risen approximately 80% since the beginning of this year, fell 3% to $ 253 before the market opened.
Premium subscribers, who account for the majority of the company’s revenue, increased 27% year-over-year. Analysts on average expected the company to have 136.4 million paid subscribers, according to Refinitiv’s IBES data.
The world’s largest music streaming service also calmed investors that people who no longer commute to work would not have a profound and lasting impact on their finances and will achieve their year-round goals.
The strength in North America and other areas more than offset the slow start to the quarter and the improved momentum in the later half of the quarter continued through the third quarter, the company said in a statement.
A total of premium subscribers in the range of 140 million to 144 million are expected for the third quarter, above expectations of 141.4 million.
Spotify also forecast total revenue in the range of 1.85 billion euros to 2.05 billion for the third quarter. Analysts expected 2.01 billion euros.
Revenue rose 13% to 1.89 billion euros ($ 2.22 billion) for the three months ending June 30, but omitted analyst estimates of 1.93 billion.
The net loss attributable to Spotify was 356 million euros, or 1.91 per share, compared to 76 million or 42 euro cents the previous year. Analysts had expected a loss of 45 euro cents.
The broader loss was primarily due to social charges: payroll taxes associated with employee benefits in Sweden, which increase with an increase in the company’s stock price.
(Report by Supantha Mukherjee in Stockholm and Ken Li in New York, edited by Johan Ahlander and Louise Heavens)
