Spotify sinks after delivering disappointing revenue guidance

Getty Images NewsSpotify CEO Daniel Ek.
  • Spotify beat on profits and sales.
  • Subscriber growth was in line with its own expectations.
  • The company’s fourth-quarter revenue guidance fell short of Wall Street estimates.
  • Shares dropped more than 5% ahead of Thursday’s opening bell.
  • Watch Spotify trade live.

Spotify was sinking ahead of Thursday’s opening bell, down more than 5%, after disappointing revenue guidanceand subscriber growth that was in line with its own expectations.

The world’s biggest paid-music service on Thursday said it earned €0.23 per share, well above the €0.24 loss that was expected by the Bloomberg consensus. It generated €1.35 billion of revenue, edging out the €1.33 billion estimate.

Spotify said it gained 4 million premium subscribers in the third quarter, within its forecast range of between 2 million and 5 million. It had 87 million premium subscribers in total at the end of the third quarter.

“The quarter was largely in line with our expectations and our guidance range, except that Operating Margin outperformed our forecast,” Spotify said in a press release.

Looking ahead, the streaming-music company expects its fourth-quarter revenue to be between €1.35 billion and 1.55 billion, the midpoint of which was below the average analyst estimate, according to Bloomberg. Spotify sees its total premium subscribers in the range of 93 million to 96 million by the end of this year.

Shares were down 5% since going public in April.

Now read:

SPOTMarkets Insider

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.