Spotify Technology SA (NYSE:SPOT) reported a robust third quarter performance, surpassing expectations on revenue, earnings, and user growth.
The audio streaming platform reported a 7% year-over-year increase in revenue to €4.27 billion, slightly ahead of Wall Street estimates of €4.23 billion and the company’s guidance of €4.2 billion.
Adjusted earnings per share were €3.28, well ahead of estimates of €1.98 and up from €1.45 in the year-ago quarter.
Operating income of €582 million beat Spotify’s guidance of €485 million, attributed to lower social charges and gross margin strength, which came in above guidance of 31.1% at 31.6%.
Spotify added 17 million monthly active users, versus guidance of 14 million additions.
Subscriber net additions were up 12% or 5 million from the year-ago period, in line with guidance.
Looking forward, Spotify guided fourth quarter revenue of €4.5 billion, just below analysts’ expectations of €4.57 billion, due in part to currency headwinds.
The company anticipates monthly active users will reach 745 million, surpassing the consensus estimate of 740 million, while premium subscribers are expected to total 289 million, in line with expectations.
“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 as we reinvest to support our long-term potential,” Spotify said in its earnings presentation.
After initially rising on the report, shares of Spotify edged 0.5% lower to $641 on Tuesday morning.