Spotify shares pop on better-than-expected profit forecast

November 12

The Spotify logo is displayed on a screen on the floor of the New York Stock Exchange on Dec. 4, 2023.

Brendan Mcdermid | Reuters

Spotify shares rose in extended trading on Tuesday after the music streaming company issued a profit forecast for the fourth quarter that topped estimates.

Here’s how the company did, compared to what analysts expected:

Earnings per share: 1.45 euros vs. 1.72 euros expected by LSEG
Revenue: 3.99 billion euros vs. 4.02 billion euros expected by LSEG
Monthly active users (MAUs): 640 million vs. 639 million expected by StreetAccount

While the Swedish company’s earnings and revenue for the third quarter trailed estimates, investors focused instead on guidance for the current period.

Spotify said operating income in the fourth quarter will come in at 481 million euros, exceeding the average analyst estimate of 432.7 million euros, according to StreetAccount. MAUs will increase to 665 million, while analysts were expecting 659.3 million, based on a StreetAccount estimate.

Still, revenue guidance trailed estimates. The company said sales will reach 4.1 billion euros, below the average analyst estimate of 4.26 billion euros, according to LSEG.

Subscribers to Spotify Premium, the company’s ad-free membership service that allows users to select songs on an unlimited basis, increased 12% year over year to 252 million, slightly ahead of estimates.

Spotify shares rose about 8% following the report to $452.35 after rising 2.2% in regular trading. The stock has more than doubled in value this year.

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