Spotify has today forecast fourth-quarter profit above Wall Street expectations, betting on robust user growth and a boost from price hikes in the crucial holiday season.
Shares of the company, which competes with Apple and Amazon's music streaming offerings, rose 5.3% in premarket trading.
The Swedish streaming giant has raised prices of its premium individual subscription and cut down on marketing and personnel-related costs to boost profitability.
This is the first batch of results since it announced in September founder-CEO Daniel Ek willbecome executive chairman in January, as it adopts a new co-CEO structure.
The company has also rolled out new features including a long-awaited high-quality streaming option called lossless audio, aiming to boost engagement.
Spotify's audiobook listeners climbed 36% and consumption hours grew 37% over the past year, led by younger audiences, it said last month, around two years after adding the product to paid subscriptions.
Last month, the company teamed up with ChatGPT-owner OpenAI to let users link their Spotify account within the chatbot and ask for music or podcast recommendations through conversational prompts in a bid to boost user growth and engagement.
Spotify expects operating income of €620m in the fourth quarter, above analysts' average estimate of €618.6m, according LSEG-compiled data.
The company forecast fourth-quarter revenue of €4.5 billion, compared with the €4.57 billion estimates.
Its quarterly monthly active users forecast of 745 million was above an estimate of 737.3 million, while its forecast for an 8 million increase in premium subscribers to 289 million was marginally below the estimate of 290.9 million.
Premium subscribers rose 12% to 281 million in the third quarter, in line with estimates. Its monthly active users (MAU) net additions of 17 million took the total to 713 million, exceeding expectations.
Revenue rose 7% to €4.27 billion, beating estimates of €4.23 billion.
