Geetha Ranganathan, Bloomberg Intelligence US Media Analyst discusses Spotify’s record user growth and the enhancements made to Paramount’s offer for Warner Bros. Discovery.
Shares of Spotify Technology SA jumped the most in nearly eight years after the Swedish music streaming giant added a record number of users last quarter, far surpassing analysts’ expectations.
The world’s biggest streaming service added 38 million new listeners from October through December to reach 751 million, according to a statement Tuesday. Paid premium subscriptions increased 10% to 290 million. Spotify said it expects to reach 759 million monthly active users in the current quarter.
The company credited its annual “Wrapped” campaign, which provides users with a personalized, data-driven summary of their listening habits over the past year in a format designed to be shared and compared across social media. Spotify also cited the launch of an enhanced free tier around the world as contributing to the growth.
The shares rose as much as 19%, their biggest intraday gain since April 2018. After increasing 29% last year, the stock gave up most of those gains heading into the quarterly report as analysts focused on concerns about the impact of artificial intelligence and Spotify’s ability to continue to raise prices.
The solid beat in results is an early win for Gustav Söderström and Alex Norström, who took the helm at the company as co-chief executive officers at the beginning of the year from long-time leader and co-founder Daniel Ek. Over the past two decades, Spotify has expanded from music streaming to incorporate podcasts, audiobooks, video and now physical books as it seeks to become a broad-based entertainment hub.
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