Streaming music leader Spotify Technology late Tuesday beat expectations for subscribers and total users in the third quarter. Spotify stock surged in extended trading.
The Stockholm-based company added 6 million premium subscribers in the September quarter. Analysts polled by FactSet had expected Spotify to add 5.19 million subscribers. Spotify ended the period with 252 million total paying subscribers worldwide.
Spotify also tallied 640 million monthly active users in the third quarter vs. Wall Street's target of 639 million. Spotify offers an ad-supported service in addition to its commercial-free subscription service.
On a year-over-year basis, Spotify's premium subscriber count rose 12% while its monthly active users increased 11%.
The audio entertainment service earned the equivalent of $1.59 a share on sales of $4.38 billion in the September quarter. Spotify reports financial results in euros. Analysts polled by FactSet had predicted Spotify would earn $1.80 a share on sales of $4.29 billion. In the year-earlier period, Spotify earned 35 cents a share on sales of $3.56 billion.
"We've never been in a stronger position," Chief Executive Daniel Ek said in a news release. "We're where we set out to be — if not a little further — and on a steady path toward achieving our long-term goals."
Spotify Stock: Mixed Guidance For Q4
For the current quarter, Spotify predicted adding 8 million premium subscribers for a total of 260 million, in line with estimates. It expects to increase monthly active users by 25 million to 665 million in the fourth quarter, topping estimates for 660 million.
Further, it expects to generate the equivalent of $4.35 billion in revenue vs. the consensus estimate of $4.53 billion.
In after-hours trading on the stock market today, Spotify stock jumped more than 7% to 449.77. During the regular session Tuesday, Spotify stock rose 2.2% to close at 419.39. Earlier in the session, Spotify notched a regular-session record high of 419.72.
On Sept. 19, Spotify stock broke out of a six-week consolidation pattern at a buy point of 359.38, according to IBD MarketSurge charts.
Spotify stock is on the IBD Tech Leaders list.
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