SPOTIFY RISES TO 574M USERS IN SOLID THIRD QUARTER

Spotify returned to profitability in the third quarter of 2023 as monthly active users (MAU) rose 26% to 574m.

The net addition of 23m MAU represented the second largest Q3 net addition performance in the streamer’s history as all regions experienced double digit growth.

CEO Daniel Ek told stock analysts that the company is “well on our way” to hitting the goal of 1b users by 2030.

The streamery's share price closed Tuesday at $170.63, a 10.36% rise over Monday's close. The stock has risen nearly 24% over the last six months.

Premium subscribers grew 16% over Q3 2022 to 226m in the three-month period that ended 9/30. The net addition of 6m was 2m ahead of guidance as North America and Latin America led the growth.

Revenue grew 11% to €3.4b ($3.62b) as operating income came in at €32m. Gross margin finished above guidance at 26.4%.

CFO Paul Vogel told the analysts the company is “on a different trajectory” and that it will be “consistently be in the black” in the future.

Premium revenue grew 10% to €2.91b. Ad-Supported revenue was also up 16%, climbing to €447m.

“We walked into 2023 thinking we were doing just over 20m [net additions] and are on track to add 30m," Ek said. "It’s the second biggest [year] in gains since going public.”

Ek noted the growth “modestly exceeded our expectations” as it occurred against the backdrop of price increases in more than 50 markets during the quarter.

Vogel said the user churn due to the price increases was within expectations while the growth in new paying customers was better than expected.

Spotify brass is now predicting the service will top 600m users by the end of the year with 235m of them being paying customers.