Spotify Technology (NYSE: SPOT) have gone against market expectations by delivering both profit and revenue growth in their third quarter trading update.
This was caused by an influx of new users and subscribers which drove revenue gains and increasing profits.
The music streaming company posted net profits of €241.0m for the three months ended 30 September, compared with €43.0m for the comparable year-ago period, which was ahead of the loss that analysts had anticipated.
Additionally, revenue increased by 28% to €1.73 billion exceeding the €1.72 billion expected by analysts polled by FactSet.
The rise in revenue was caused by a increase in monthly subscribers, rising by 30% to 248 million users, whilst premium subscribers increased by 31% to 113 million.
In particular, developing economies saw a big increase in users with the rate of increase in the number of Latin American users accelerating for the 2nd consecutive quarter.
Notably, the number of users in India outperformed forecasts seeing a 30% rise following a successful marketing campaign.
The additions of Spotify Family Plan and Student discount helped boost Spotify’s users, and extra features such as including parental controls to filter explicit content seemed to be a hit.
The company has remained confident that it can keep its foot holding in the music streaming software industry following competition from Apple Music (NASDAQ: AAPL), Amazon Music (NASDAQ: AMZN) and Deezer.
Spotify were also quick to point out that they had added close to twice as many subscribers per month than Apple Music.
The New York-listed company recently announced that chief financial officer Barry McCarthy will step down on January 15th.
Paul Vogel, who is currently serving as vice president of financial planning & analysis, treasury and investor relations will take over from McCarthy.
Spotify have set targets for full year revenues in the range of €1.74 billion to €1.94 billion.
Shares of Spotify are trading at $135.5 USD, seeing a 3.35% drop during Tuesday trading.
In the retail sector, there have been updates. Tesco (LON: TSCO) are set to trial their Clubcard plus, Dominos Pizza (LON:DOM) are set to quit international operations, and Superdry (LON: SDRY) have a new facilities management supplier.
