STOCKHOLM / LONDON (IT BOLTWISE) – Spotify reports unexpectedly strong growth in monthly active users, while premium subscriber growth meets expectations. Despite an increase in sales in the third quarter, forecasts for the final quarter remain below expectations.
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Spotify, the world’s leading music streaming service, has recorded impressive growth in monthly active users in the third quarter of 2023. The figure rose 11 percent to 713 million, beating analysts’ expectations. This development shows Spotify’s continued ability to expand its user base globally, despite an increasingly competitive market.
While the growth of premium subscribers was in line with expectations with an increase of 12 percent to 281 million, it appears that the market for paid subscriptions is more saturated. This could indicate that Spotify needs to develop new strategies to attract more users to the premium version, especially in regions where the service already has a strong presence.
Financially, Spotify recorded a sales increase of 7 percent to almost 4.3 billion euros in the third quarter. The company’s operating profit rose by over 25 percent to 582 million euros. These figures show that the company remains profitable despite the 6 percent decline in advertising-supported revenue to €446 million.
For the fourth quarter, Spotify forecasts 745 million users, which is again above analysts’ expectations. However, the forecasts for premium subscribers remain slightly below estimates at 289 million. The expected sales of 4.5 billion euros for the final quarter also do not correspond to market expectations, which indicates uncertainties in future sales development.
Stock market reaction has been mixed as investors weigh Spotify’s long-term growth prospects. While the user numbers are impressive, the challenge remains to convert this into increased revenue. Competition from other streaming services and the need to offer innovative features and content to retain users are key issues for Spotify’s future.
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