Spotify's high gross margins drive Q2 earnings 📈

Spotify Technology (SPOT.US) shares are up 14% before the opening of the session on Wall Street due to the company presenting better-than-expected results for the second quarter of 2024. The biggest positive surprise during the publication of the results were the high gross margins, which are one of the key performance metrics for the company. Premium subscriber profits were better than expected, and this momentum is likely to continue in the third quarter of this year. On the other hand, the values ​​of the monthly number of active users turned out to be lower than expected.

SECOND QUARTER RESULTS

• Revenue: €3.81 billion, estimated €3.81 billion
• Premium subscriber revenue: €3.35 billion, estimated €3.34 billion
• Gross margin 29.2%, estimate 28.1%
• Monthly active users (MAU) 626 million, estimated 631.46 million
• Total number of premium subscribers 246 million, +12% y/y, estimated 245.15 million
• Ad-supported MAUs are 393 million, estimated 397.71 million

FORECAST FOR THE THIRD QUARTER

• The company forecast 639 million monthly active users, down from an estimate of 650.45 million
• It sees revenues of €4 billion, estimated €4.01 billion
• Total premium subscribers expected to be 251 million, estimated 250.74 million
• The company forecasts gross margin of 30.2%, estimated 28.6%

Currently, Spotify shares are gaining nearly 14% ahead of the opening session on Wall Street. Source: xStation