Spotify tops forecasts on active users while loss widens

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The U.S.-listed shares of Spotify Technology S.A. SPOT, -5.84% rallied 2.9% in premarket trading Wednesday, after the Luxembourg-based digital music service company reported a wider-than-expected second-quarter loss but revenue and monthly active users (MAUs) that beat expectations and provided an upbeat outlook. Net losses widened to EUR125 million ($126.8 million), or EUR0.85 a share, from EUR20 million, or EUR0.19 a share, in the year-ago period. The FactSet per-share loss consensus was EUR0.68. Revenue grew 22.9% to EUR2.86 billion ($2.90 billion), above the FactSet consensus of EUR2.81 billion. Cost of sales increased more than sales, rising 29.5% to EUR2.16 billion, as gross margin contracted to 24.6% from 28.4%. MAUs increased 18.6% to 433 million, beating the FactSet consensus of 428.2 million, while premium subscribers grew 13.9% to 188 million. For the third quarter, Spotify expects MAUs of 450 million, above current expectations of 443.9 million. The stock has gained 7.6% over the past three months through Tuesday, while the S&P 500 SPX, -1.15% has lost 6.3%.

This article was originally published by Marketwatch.com. Read the original article here.

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