What just happened? Spotify also used the opportunity to announce that CFO Barry McCarthy will retire on January 15, 2020. Existing VP of FP&A, treasury and investor relations, Paul Vogel, will fill the vacancy, we’re told. The company expects McCarthy to rejoin its board of directors, pending shareholder approval.
Spotify on Monday published third quarter financials that have excited investors in early-morning trading.
For the quarter ending September 30, Spotify generated total revenue of €1.73 billion ($1.88 billion), a 28 percent increase year-over-year. Operating profit for the quarter was €54 million. Gross margin checked in at 25.5 percent, which was above the high end of Spotify’s guidance of 23.2 percent to 25.2 percent, thanks in part to favorable royalty costs on its core music product.
Free cash flow was positive for the eighth consecutive quarter.
Spotify finished the three-month period with 113 million premium (paying) subscribers, up 31 percent compared to the same period a year earlier. Total monthly active users, meanwhile, climbed 30 percent year-over-year to 248 million. Spotify cited “exceptional” growth in podcast hours streamed as well as strong performance in its family and student plans as contributing factors to its quarterly user growth.
Share value is up nearly 18 percent on today's news.
Looking ahead to the fourth quarter, Spotify forecasts revenue of between €1.74 and €1.94 billion, an operating loss of €31 million to €131 million, total premium subscribers of 120 million to 125 million and total MAUs of between 255 million and 270 million.
Image credit: NYSE Spotify by Christopher Penler