Spotify Technology SA (NYSE:SPOT) shares popped higher on Wednesday after the New York-listed audio streaming giant posted a second-quarter revenue beat and a 14% increase in paid subscribers.
The Sweden-based company reported revenue of 2.9 billion euros ($2.94 billion), a 23% increase year-over-year, compared to expectations of 2.8 billion euros, according to IBES data from Refinitiv.
Spotify Premium subscribers rose to 188 million, which similarly beat analyst expectations of 187 million. Monthly active users increased nearly 20% to 433 million, beating expectations of 428 million.
Shares were up nearly 14% to $118.28 around noon on Wednesday.
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Additionally, Spotify announced that it will no longer produce the Car Thing, a voice-activated dashboard streaming device released in April 2021. Originally priced at $89.99, the product is now available for $49.99, according to reports.
Looking ahead, Spotify projected 194 million third-quarter paid subscribers, which is in line with analyst expectations. The company also expects revenue of 3 billion euros, above estimates of 2.95 billion euros.
Ad Revenue
Spotify reported ad-supported revenue of 360 million euros, a 31% increase from the second quarter of 2021. It also reached 13% of the company’s overall revenue, a record high.
That separates Spotify from the pack in some regard, as companies who rely on ad-supported revenue have seen their share prices wobble, according to media reports, after Snap Inc (NYSE:SNAP) issued a warning that industry-wide digital ad spending would decline in response to worsening economic conditions.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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