Spotify on Tuesday reported strong third-quarter results that topped Wall Street expectations and saw total revenue climb 12% year over year, but issued weak guidance for revenue and subscribers for the current quarter.
Shares of Spotify fell 2% on Tuesday.
Here's what Spotify reported compared with LSEG estimates:
Earnings per share: 3.28 euros vs. 1.97 euros expected.
3.28 euros vs. 1.97 euros expected. Revenue: 4.27 billion euros vs. 4.23 billion euros expected.
The streaming platform increased premium subscribers by 12% to 281 million, coming in just below StreetAccount expectations of 281.24 million.
Spotify hiked subscription prices in August to 11.99 euros from 10.99 euros in multiple markets, including South Asia, the Middle East, Africa, Europe, Latin America and the Asia-Pacific region.
Premium revenue for Q3 grew 9%, or 13% on a constant currency basis, but 446 million euros in ad-supported revenue was down 6% from last year, which was flat on a constant currency basis.
StreetAccount expected 467.7 million euros in ad-supported revenue for the quarter.
"The business is healthy," CEO Daniel Ek said in a release. "We're shipping faster than ever. And we have the tools we need – pricing, product innovation, operational leverage, and eventually the ads turnaround – to deliver both revenue growth and profit expansion."
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