Spotify increased the number of subscribers in the third quarter on Thursday that exceeded Wall Street’s expectations and predicts strong growth this quarter as more users begin to listen to its streaming music service.
Spotify has more than twice as many subscribers as its closest competitor, Apple Music. After being launched in India and the Middle East last year, Spotify has rapidly expanded in the European market.
Premium subscribers, which accounted for most of its revenue, increased by 27% from the same period last year to 144 million. According to Refinitiv’s IBES data, analysts on average expect the company to have 142.5 million paying users. The total number of monthly active users increased by 29% to 320 million.
The company expects the total number of premium subscribers in the fourth quarter to be between 150 million and 154 million. Analysts expect the number to reach 151.5 million.
Spotify attributed the increase in the number of users to its recent launch in new markets such as Russia, which the company regards as the “most successful new market launch” to date.
The company, which makes money by paying for subscriptions and showing ads to non-paying users, has resumed its advertising business growth due to the global pandemic that affected its advertising growth earlier this year.
Revenue for the quarter increased by 14% to 1.98 billion euros (approximately Rs 17,268 crore). According to Refinitiv’s IBES data, analysts expect revenue of 2 billion euros (about 17442 crore).
Excluding the impact of foreign exchange, Spotify said its quarterly revenue was “slightly better than expected.”
© Thomson Reuters 2020
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