Spotify Technology SA (NYSE: SPOT) reported fiscal second-quarter 2024 revenue growth of 20% year-on-year to $4.099 billion (3.81 billion euros), missing the analyst consensus estimate of $4.170 billion.
EPS of $1.43 (1.33 euros) beat the analyst consensus estimate of $1.15.
Premium Revenue grew 21% year over year to 3.35 billion euros, helped by subscriber additions and ARPU increases. Ad-supported revenue grew 13% Y/Y to 456 million euros.
Spotify's Total MAUs (Monthly Active Users) rose 14% Y/Y to 626 million. It reported 246 million Premium subscribers, adding 7 million versus 6 million estimates, the Variety reports. Ad-supported MAUs grew 15% Y/Y to 393 million.
Within Premium, the average revenue per user (ARPU) rose by 8% year over year to 4.62 euros. Ad-supported revenue rose 13%.
Margins: The gross margin improved by 510 bps to 29.2%, reflecting improved podcast and music profitability.
The Premium gross margin was 31.4%, up 291 bps Y/Y, reflecting improvements in music profitability.
The ad-supported gross margin was 13.4%, which is up 1,907 bps Y/Y, reflecting lapping of prior year charges related to efficiency actions, an improvement in podcast and music profitability. Operating income improved to 266 million euros with a margin of 7.0%.
Spotify held 5.4 billion euros in cash and equivalents and generated €490 million in free cash flow.
Outlook: Spotify expects third-quarter revenue of $4.31 billion (4.0 billion euros) versus a consensus of $4.37 billion and total MAUs of 639 million.
Price action: SPOT shares traded higher by 13.10% at $335 premarket at the last check on Tuesday.