Spotify revenue beats as more paid subscribers tune in, shares rise

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© Reuters. A trader is reflected in a computer screen displaying the Spotify brand before the company begins selling as a direct listing on the floor of the New York Stock Exchange in New York© Reuters. A trader is reflected in a computer screen displaying the Spotify brand before the company begins selling as a direct listing on the floor of the New York Stock Exchange in New York

(Reuters) – Spotify Technology SA’s (N:) quarterly revenue beat Wall Street expectations on Monday, as the music streaming company added more-than-expected paid subscribers for its premium service.

The Swedish company’s shares, which have risen about 6% since the beginning of this year, were up 4.4% at $126 before the bell.

The company’s premium subscribers rose 31% to 113 million from a year earlier. Analysts were expecting the company to have 112.9 million paid subscribers, according to IBES data from Refinitiv.

The world’s most popular music streaming service also forecast fourth-quarter total premium subscribers in the range of 120 million to 125 million, the mid-point of which was in line with expectations of 122.6 million.

Spotify, which launched its service over a decade ago, has been able to overcome resistance from large record labels and some major music artists to reshape how people listen to music.

The company, however, still faces growing competition from Apple Inc (O:) and other players in the market.

For the third quarter, net income attributable to owners of the parent was 241 million euros ($267.34 million), or 36 cents per share, compared with 43 million euros, or 23 cents per share, a year earlier. Analysts were expecting a loss of 29 cents per share.

Revenue rose 28% to 1.73 billion euros for the three-months ended Sept. 30. Analysts were expecting revenue of 1.72 billion euros.

The company forecast total revenue of 1.74 billion euros to 1.94 billion euros for the fourth quarter. Analysts were expecting revenue of 1.89 billion euros.

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