Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Spotify Jumps Off Strong Q3 Numbers, Podcast Excitement

Published 27/10/2021, 14:48
Updated 27/10/2021, 14:48
© Reuters.

© Reuters.

by Daniel Shvartsman

Spotify Technology SA (NYSE:SPOT) shares opened up 7% after a strong Q3 that gave investors confidence over the company’s podcast investments.

Spotify reported revenue of €2.5B, beating estimates of €2.45B. Monthly Active Users (MAUs) went up 19% year over year to 381 million, with both ad-supported non-paying users and premium users rising 19%. Ad-supported revenue grew 75% year over year and 17% quarter over quarter, while premium subscription revenue grew 22% year over year.

The ad-supported revenue ties to Spotify’s meaningful investments in podcasts, which the company hopes will boost both retention among paying users and gross margins as the content is fully owned vs. licensed songs from music labels. Ad-supported gross margins jumped to 10% this quarter, still off the 30% levels of the premium business but a big jump from 8% in the first half of the year and basically break even last year. On the premium side, ARPU was 4% year over year, up to €4.34 per user.

The shareholder letter pointed out that podcasts on Spotify are up to 3.2M from 2.9M last quarter, and that the Spotify Audience network has seen the number of podcasts on it grow by more than 50% since launch, with “nearly 1 in 5 Spotify advertisers are already participating.”

Spotify’s guidance for Q4 included MAU of 400-407 million and revenue of €2.54-2.68 billion, an increase on the lower end of the revenue range, with gross margins expected to come in at 25.1-26.1%.

The company also produced 99M in free cash flow this quarter and repurchased 157,510 shares for €30 million under this program at an average cost of $222.86 per share, under their new 1B authorization.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.