Shares of Spotify erupted Tuesday after the audio streaming service delivered robust earnings, as the company seeks to achieve a rarity in the streaming space: Sustained profitability.Spotify stock leapt 14% in early trading, which would be its largest daily percentage rally since October 2019 and second-best day in the Sweden-based company’s six years on the New York Stock Exchange.
Spotify’s premarket share price of $337 would be its highest intraday share price since February 2021.Its record 246 million paid subscribers was above analyst estimates of 245.3 million, according to FactSet, its record $1.44 earnings per share smashed forecasts of $1.14, and its $4.1 billion of revenue was just below expectations of $4.15 billion.
Perhaps most eye popping was Spotify’s $532 million in second-quarter free cash flow, shattering estimates of $363 million and representing 4,700% year-over-year growth from Q2 2023’s $11 million in the metric which measures how much money a company actually made after expenses in a period. With more than $500 million in net income booked in Spotify’s first two quarters and a further $630 million projected over the second half of the year, Wall Street now expects the streamer to easily tally its first-ever profitable year, turning around from 2022’s $467 million loss and 2023’s $572 million loss.We’re launching text message alerts so you'll always know the biggest stories shaping the day’s headlines. Text “Alerts” to 335-0739 or sign up330%.