Spotify: stock slumps as advertising disappoints
(CercleFinance.com) - Swedish music streaming group Spotify Technology reported disappointing Q3 advertising revenues on Tuesday evening, causing the company's stock to tumble 13% on Wednesday on Wall Street, having lost almost a third of its value since its Wall Street IPO in 2018.
The company's total monthly user base climbed 20% to 456 million in the period, above the consensus of 450 million.
The number of paid subscribers rose 13% to 195 million, while the number of free accounts rose 24% to 273 million.
However, advertising revenue, particularly from podcasts, only increased by 19% year-on-year, a performance that is below expectations, which the Swedish group explains by the consequences of soaring inflation in Europe.
Overall, Q3 sales rose by 21% to 3.04 billion euros, in line with analysts' forecasts.
Meanwhile, its gross margin, fell to 24.7% from 26.7% in the third quarter of 2021, slightly above the 25.2% expected by analysts..
However, advertising revenues, particularly from podcasts, only increased by 19% year-on-year, performance that fell short of expectations, which the Swedish group explains by the consequences of soaring inflation in Europe.
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