Stage dive: Spotify opens down after disappointing subscriber outlook

Spotify may post its first ever profit this year as the company wiped out a major part of its loss in its third quarter of trading.

But promising results did not translate into success on the stock market as the streaming service dropped on the back of its subscriber predictions.

The figures

Paying users flocked to the platform in the quarter, up 40 per cent year-on-year, while average revenue per user dropped six per cent to €4.73 (£4.17).

Loss before tax dropped to €82m, a two-thirds reduction since last year’s third quarter. Revenues, meanwhile, grew 31 per cent to €1.4bn.

The company said its €6m operating loss could turn into a profit of up to €15m in the fourth quarter.

However, shares fell around ten per cent to $133 as the company said it expects to reach 199m-206m users by the end of the year. Analysts polled by Reuters had predicted 208m.

Why it’s important

Since it was accidentally identified as Swiss when listing on the New York Stock Exchange in April, the Swedish company has faced a turbulent six months, and is trading down 19 per cent on its $165.90 opening price.

A decade after launch, Spotify is managing to grow its paying subscriber base, but faces stiff competition from Apple Music and is yet to turn a profit.