Spotify now has 87 million premium subscribers
Spotify posted its Q3 earnings where the streaming service’s paid subscriber base increased from 83 million.
Spotify, the world's most popular paid music streaming service, on Thursday reported a modest 5% rise in premium subscribers for its third quarter, while revenue and gross margins were roughly in line with market expectations.
Caught short by a global sell-off in major tech stocks over the past month, shares of Spotify have erased their roughly 30% gain after the Swedish company's closely watched US stock market debut in April on the New York Stock Exchange.
Monthly subscribers, which deliver 90% of revenue, rose to 87 million, up from 83 million in the quarter ending June, it said. The latest results matched the average forecast in a Thomson Reuters analyst poll.
Total users rose to 191 million, including free, advertising-supported listeners.
The company tightened its expectations for full-year 2018 monthly active listeners to between 199 million to 206 million users. Analysts, on average, had been predicting 208 million users by the end of the year.
Third-quarter revenue rose 31% to 1.352 billion euros ($1.54 billion). Seventeen analysts polled by Thomson Reuters had forecast, on average, 1.33 billion euros.
Gross margins rose to 25.3% from 22.3% in the third quarter of 2017. Analysts were looking for margins around 24.9%, according to the Thomson Reuters poll.
Spotify, which launched its streaming music service a decade ago, has enjoyed a surge in subscriber growth in recent years. The growing shift by listeners to paid subscription services from free or pirated music listening are a key factor driving the improved financial health of the wider music industry.