Shulou(Shulou.com)11/24 Report--

In the early morning of October 26, Beijing time, Swedish streaming music service provider Spotify today released the company's third-quarter results for 2022. According to the financial report, Spotify's revenue in the third quarter was 3.036 billion euros, exceeding the company's previous forecast of 3 billion euros, an increase of 21% compared with 2.501 billion euros in the same period last year and an increase of 6% compared with 2.864 billion euros in the previous quarter. The net loss attributable to parent shareholders was 166 million euros, compared with 2 million euros for parent shareholders in the same period last year. The diluted loss per share attributable to parent shareholders was 0.99 euros, compared with 0.41 euros per diluted share attributable to parent shareholders in the same period last year.

Spotify's third-quarter revenue beat Wall Street analysts' expectations but underperformed analysts' expectations on diluted losses per share, sending its shares down more than 5 per cent in after-hours trading.

Financial results: Spotify's third-quarter revenue was 3.036 billion euros, exceeding the company's previous forecast of 3 billion euros, up 21% from 2.501 billion euros in the same period last year and 6% from 2.864 billion euros in the previous quarter, slightly exceeding analysts' expectations. Analysts had on average expected Spotify to generate revenue of 3.02 billion euros in the third quarter, according to Refinitiv, a provider of financial market data and infrastructure.

By business unit, Spotify's revenue from paid services in the third quarter was 2.651 billion euros, up 22% from 2.178 billion euros in the same period last year and 6% from 2.504 billion euros in the previous quarter; advertising sponsorship revenue was 385 million euros, up 19% from 323 million euros in the same period last year and 7% from 360 million euros in the previous quarter.

Spotify's third-quarter revenue cost was 2.286 billion euros, compared with 1.833 billion euros in the same period last year.

Spotify's third-quarter gross profit was 750 million euros, compared with 668 million euros in the same period last year. Spotify's third-quarter gross margin was 24.7 per cent, compared with 26.7 per cent in the same period last year and 24.6 per cent in the previous quarter.

Spotify's operating expenses were 978 million euros in the third quarter, compared with 593 million euros in the same period last year. Of this total, R & D expenditure was 386 million euros, compared with 208 million euros in the same period last year; sales and marketing expenditure was 432 million euros, compared with 280 million euros in the same period last year; and general and administrative expenses were 160 million euros, compared with 105 million euros in the same period last year.

Spotify posted an operating loss of 228 million euros in the third quarter, compared with an operating profit of 75 million euros in the same period last year and an operating loss of 194 million euros in the previous quarter. Spotify's operating loss rate was 7.5 per cent in the third quarter, compared with 3.0 per cent in the same period last year and 6.8 per cent in the previous quarter.

Spotify posted a net loss of 166 million euros attributable to parent shareholders in the third quarter, compared with 2 million euros in net profit attributable to parent shareholders in the same period last year.

Spotify posted a basic loss of EUR 0.86 per share attributable to parent shareholders in the third quarter, compared with EUR 0.01 per share for parent shareholders in the same period last year, and diluted loss per share for parent shareholders was EUR 0.99, compared with EUR 0.41 per share for parent shareholders in the same period last year, which fell short of analysts' expectations. Analysts had on average expected a loss of 85 euros per share in the third quarter of Spotify, according to data provided by Refinitiv.

Spotify's net cash flow from business operations was 40 million euros in the third quarter, compared with 123 million euros in the same period last year and 39 million euros in the previous quarter.

Spotify's free cash flow was 35 million euros in the third quarter, compared with 99 million euros in the same period last year and 37 million euros in the previous quarter.

At the end of the third quarter, Spotify had 3.7 billion euros in cash, cash equivalents, restricted cash and short-term investments, compared with 3.3 billion euros at the end of the third quarter of fiscal 2021.

Operational metrics: Spotify's MAU (number of monthly active users) was 456 million in the third quarter, up 20% from 381 million in the same period last year and 5% from 433 million in the previous quarter.

The number of paying users of Spotify reached 195 million in the third quarter, up 13 per cent from 172 million in the same period last year and 4 per cent from 188 million in the previous quarter.

Spotify supported 273 million MAU ads in the third quarter, up 24 per cent from 220 million in the same period last year and 7 per cent from 256 million in the previous quarter.

Performance outlook: for the fourth quarter of fiscal year 2022, Spotify made the following outlook:

The total number of monthly active users (MAU) is expected to reach 479 million, which means that the net new MAU in the fourth quarter is about 23 million

The total number of paying users is expected to reach 202 million, which means that the net number of new paying users in the fourth quarter is about 7 million.

Total revenue is expected to reach 3.2 billion euros, which assumes that exchange rate changes will have a positive impact on revenue growth of about 800bp over the same period last year.

Gross profit margin is expected to reach 24.5%

The operating loss is expected to reach 300 million euros, including the negative impact of exchange rate changes on operating expenses expected to be approximately 95 million euros.

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