Spotify (SPOT) stock pops as operating income guidance tops consensus

Shares of Spotify Technology (NYSE: SPOT) jumped over 3% in premarket trading Tuesday after the company's upbeat Q1 operating income guidance.

Spotify's Q4 loss per share in the quarter decreased significantly to €0.36 from €1.40 year-over-year. Analysts were looking for a loss per share of €0.37. Revenue reached €3.67 billion in the quarter, marking a 16% increase YoY, slightly below the expected €3.72 billion.

Premium revenue grew by 17% to €3.17 billion, just under the forecast of €3.19 billion. Further, the number of monthly active users (MAUs) grew to 602 million, a 23% increase YoY, aligning closely with the estimate of 602.3 million, while the total number of premium subscribers rose by 15% to 236 million, slightly above the projection of 235.01 million.

The company said over 225 MAUs engaged with Spotify Wrapped content in Q4, marking a YoY jump of 40%. Ad-supported MAUs saw a 28% increase to 379 million, essentially meeting the estimate of 378.96 million.

The company said over 225 MAUs engaged with Spotify Wrapped content in Q4, marking a YoY jump of 40%. Average revenue per user was €4.60, narrowly missing the expected €4.61. Operating losses were reduced by 68% to €75 million.

Gross margin improved to 26.7% from 25.3% the previous year, slightly above the anticipated 26.6%.

Looking ahead, the audio streaming and media services provider anticipates an operating income of €180 million, significantly surpassing the consensus estimate of €84.6 million. The company expects revenue to be €3.6 billion, below the expected €3.72 billion.

It projects MAUs to reach 618 million in the first quarter, marginally above the estimate of 617.38 million. Total premium subscribers are forecasted at 239 million, closely aligned with the expectation of 239.05 million.

Spotify also predicts a gross margin of 26.4%, slightly higher than the estimated 26.3%.

By Vahid Karaahmetovic

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