Streaming music giant Spotify Technology on Tuesday beat expectations for subscribers and earnings in the second quarter. Spotify stock surged on the news.
The Stockholm-based company added 7 million premium subscribers in the June quarter. Analysts polled by FactSet had expected Spotify to add 6.2 million subscribers. Spotify ended the period with 246 million total paying subscribers worldwide.
Spotify also tallied 626 million monthly active users in the second quarter, vs. Wall Street's target of 631 million. Spotify offers an ad-supported service in addition to its commercial-free subscription service.
The audio entertainment service earned the equivalent of $1.43 a share on sales of $4.1 billion in the June quarter. Spotify reports financial results in euros. Analysts polled by FactSet had predicted Spotify would earn $1.14 a share on sales of $4.16 billion. In the year-earlier period, Spotify lost $1.71 a share on sales of $3.56 billion.
Spotify Stock Breaks Out
On the stock market today, Spotify stock jumped as much as 16.2% to 343.24. With the move, Spotify stock broke out of a flat base at a buy point of 331.08, according to IBD MarketSurge charts.
Spotify stock ended the regular session up 12% to 330.79.
For the current quarter, Spotify forecast adding 5 million subscribers for a total of 251 million. It also expects to reach 639 million monthly active users in the third quarter. Analysts had been looking for 250 million paying subscribers and 650 million monthly active users in the September quarter.
"It's an exciting time at Spotify," Chief Executive Daniel Ek said in a written statement. "We keep on innovating and showing that we aren't just a great product, but increasingly also a great business. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future."
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