Profit and revenue fall below expectations; company projects 4th quarter with higher profits by applying layoffs and other cost cuts
Spotify’s financial results in the 3rd quarter of this year disappointed investors, with earnings falling below market expectations. The company reported earnings per diluted share of 1.45 euros, below the expected 1.72 euros.
Total revenue was €3.99 billion, lower than the expected €4.02 billion, but 19% higher when compared to the same period last year. Operating profit reached €454 million. Here is the balance sheet released this Tuesday (Nov 12, 2024) (PDF – 2 MB).
Despite the data, investors are paying attention to the results of the 4th quarter. Spotify projects that it will have an operating profit of €481 million, going beyond market expectations, which expect a result of €432.7 million. The company said it will implement employee layoffs and other cost cuts to reach the numbers.
The number of monthly active users increased by 11% compared to Q3 2023, reaching 640 million. Subscriptions increased by 12% to 252 million.
Spotify CEO and founder Daniel Ek remains confident for the ongoing quarter’s financial results.
“We are where we set out to be — if not a little further — and on a firm path to achieving our long-term goals. This relentless pursuit of innovation and commitment to growth prepares us to deliver the most valuable user experience in the industry, while reinforcing the core strengths that make Spotify unique. I’m very excited about what’s in store for us.”Ek said in a statement to investors.
After the financial statement was released, the shares rose 8%, reaching US$452.35 after the market closed. This Tuesday (Nov. 12), before the data was released, the shares had already appreciated by 2.2% on the day.
