Spotify posts small third quarter profit

The number of active users rose by 19 per cent from a year ago to 381 million at the end of September, while paying subscribers also rose by 19 per cent to 172 million, the group said. — AFP pic
The number of active users rose by 19 per cent from a year ago to 381 million at the end of September, while paying subscribers also rose by 19 per cent to 172 million, the group said. — AFP pic

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STOCKHOLM, Oct 27 — Swedish music streaming service Spotify today posted a net profit of €2 million (RM9.6 million) in the third quarter, just the sixth time it has turned a quarterly profit since being listed in 2018.

The number of active users rose by 19 per cent from a year ago to 381 million at the end of September, while paying subscribers — Spotify’s main source of revenue — also rose by 19 per cent to 172 million, the group said.

The results were in line with Spotify’s and analysts expectations. In July the company said it expected to have to 377 to 382 million active users and 170 to 174 million paying subscribers.

The company, which is based in Stockholm but listed on the New York Stock Exchange, said it hoped to have at least 400 million users and 177-181 paying subscribers by the end of the year.

For the period July-September, the company’s €2 million profit was much stronger than analysts’ forecast of a net loss.

In the same quarter last year, the company posted a loss of €101 million, largely due to higher operating expenses.

“We saw another quarter of significant advertising strength, and user engagement metrics across many markets showed encouraging signs of growth,” the group said.

Sales for the period jumped by almost 27 per cent from a year ago to €2.5 billion.

Spotify has never turned a full-year profit since being listed in 2018.

In 2020, the company tripled its full-year net loss to €581 million, mainly due to its strong share price as it has a share-based employee remuneration system. — AFP

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