1 week Ago By Todd Spangler
Spotify cranked up the volume with another strong quarter, packing on 6 million paying subscribers globally in Q3 and issuing an upbeat forecast for the year-end quarter — saying it’s on track to hit profitability for the full year for the first time. The audio streaming giant met or exceeded its previous Q3 forecasts on financial and subscriber metrics. For the quarter, the company reported €4.
0 billion in revenue, up 19%, and record net income of €300 million, up more than fourfold from €65 million a year earlier. Operating income came in at a record €454 million, with gross margin of 31.1% versus 26.
4% in the year-earlier period. Spotify gained 14 million total monthly active users (free and paid) to stand at 640 million at the end of Q3. Premium subs stood at 252 million, with growth in the quarter across all regions and “outperformance” led by Europe and Latin America, the company said.
Shares of Spotify rose more than 8% in after-hours trading on the Q3 earnings announcement. “We’ve never been in a stronger position, thanks to the outstanding execution by our team. I’m incredibly proud of the way we’ve delivered and the progress we’ve made,” Daniel Ek, Spotify co-founder and CEO said in announcing the results.
“We’re where we set out to be — if not a little further — and on a steady path toward achieving our long-term goals.” On the company’s earnings call, Ek said he and other Spotify execs were in L.A.
this week meeting with creators, and he teased “exciting” upcoming announcements about a further “expansion into video.” Spotify’s operating expenses declined 8% year over year in Q3, driven by a decrease in “personnel and related costs” and lower marketing spend. The company had 7,242 full-time employees as of the end of September, following significant layoffs in late 2023 into the early part of this year.
In early June, Spotify raised prices for most of its existing plans in the U.S. The Individual plan increased by $1, from $10.
99 to $11.99 per month, while the Family plan, which provides access for up to six members a household, went up by $3, from $16.99 to $19.
99 per month. That makes Spotify slightly pricier in the U.S.
than its chief rival, Apple Music. Last month, Spotify launched music videos in beta in 85 new markets (97 markets in total), giving Premium subscribers “the chance to dive into the visual worlds of top artists,” according to the company. In July, Spotify launched comments for podcasts, letting podcast creators “better connect with and grow their audiences.
” Per its previous Q3 guidance, Spotify had expected adding 13 million total monthly active users and 5 million Premium subscribers. The company had forecast total revenue of €4.0 billion, operating income of €405 million and gross margin of 30.
2%. For Q4, Spotify provided the following outlook: In September, Sahar Elhabashi, head of Spotify’s podcast business, announced she will exit the post at the end of 2024 after six years at the company. In the interim, Roman Wasenmüller, who currently helps lead Spotify’s podcast efforts internationally, will lead the podcast group.
(Pictured top: Spotify co-founder and CEO Daniel Ek).
