Shares sing as Spotify beats forecasts, lifts guidance

(Sharecast News) - Spotify boosted earnings guidance on Tuesday, following an above-forecast spike in users and revenues during the third quarter. The Swedish streaming giant posted total revenues of €4.27bn in the three months to September end, up 7% year-on-year and narrowly ahead of forecasts.

Operating income was 28% stronger at €582m, boosted by higher prices and cost cutting.

Total monthly active users (MAUs) increased by 17m to 713m, ahead of forecasts for a 14m hike. Premium subscribers rose 12% to 281m.

The firm said: "Overall, we are very pleased with our performance heading into year-end, and view the business as well-positioned to deliver growth and improving margins in 2025."

The group is now targeting total MAUs of 745m in the fourth quarter - above expectations for 737m - and revenues of €4.5bn.

Operating income is expected to come in at €620m, higher than the €618m most analysts had already pencilled in.

As at 1230 GMT, Spotify's New York-listed shares were up 5% in pre-market trading.

Founder and chief executive Daniel Ek - who is moving to an executive chair role from January - said: "The business is healthy.

"It all comes back to user fundamentals and that's where we are: 700m users who keep coming back, engagement at all-time highs. We're building Spotify for the long-term."

Spotify announced in September that its billionaire founder - who set up the business in 2006 - would step back from the day-to-day running of the company to focus on strategy. He will be replaced by co-chief executives Gustav Soderstrom, chief product and technology officer, and Alex Norstrom, chief business officer.