Spotify Shares Gain Premarket As It Tops Q2, Gives Upbeat Q3 Outlook

Spotify Shares Gain Premarket As It Tops Q2, Gives Upbeat Q3 Outlook
  • Spotify Technology SA SPOT reported second-quarter FY22 revenue growth of 23% year-over-year to €2.86 billion ($3.05 billion), beating the consensus of $2.86 billion.
  • EPS loss was of €(0.85) ($(0.91)) missed the consensus loss of $(0.65).
  • Premium Revenue grew 22% Y/Y to €2.50 billion, while Ad-Supported Revenue grew 31% Y/Y to €360 million.
  • Drivers: The monthly active users (MAU) rose 19% Y/Y to 433 million. Premium subscribers were 188 million MAUs, up 14% Y/Y. The ARPU was up 6% Y/Y for premium subscribers.
  • Margin: The adjusted gross margin contracted 120 bps to 25.3% due to continued growth in Marketplace activity, favorable revenue mix shift to podcasting offset by non-music content and product enhancement spend, and higher publishing rates.
  • Premium Gross Margin was 28.8%, flat Y/Y.
  • Spotify held €3.6 billion in cash and equivalents.
  • Nearly all of our key metrics surpassed guidance in Q2’22, led by MAU and Subscriber outperformance, healthy Revenue growth, and a modestly better Operating Loss. 
  • Outlook: Spotify expects Q3 revenue of €3.0 billion ($3.20 billion, above the consensus of $3.02 billion), total MAUs of 450 million, and total premium subscribers of 194 million
  • Price Action: SPOT shares traded higher by 5.80% at $110 in the premarket on the last check Wednesday.
  • Photo by Photo Mix from Pixabay

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