Spotify beats revenue estimates on ads, user growth

Spotify Technology reported quarterly revenue on Wednesday that beat analysts’ estimates on higher advertising income and as more people subscribed to its premium service, sending the audio streaming platform’s shares up about 5% in trading before the bell.

The company has bet big on podcasts, investing over a billion dollars in acquiring shows such as the “The Joe Rogan Experience” and other businesses in a bid to draw users to a growing non-music audio segment.

Total monthly active users rose 19% to a record 422 million in the first quarter.

The Swedish company posted a 24% increase in revenue to 2.66 billion euros ($2.82 billion) in the quarter. Analysts on average had expected revenue of 2.62 billion euros, according to IBES data from Refinitiv.

Spotify said the share of podcasts in content consumption on its platform grew by double digits and reached an all-time high in the reported quarter.

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The company now expects total monthly active users of 428 million in the second quarter following the closure of its Russian operations and the reversal of a loss of users after a service outage in March.

Spotify forecast second-quarter revenue of 2.8 billion euros, compared with estimates of 2.81 billion euros.

Premium subscribers, who account for most of the company’s revenue, rose to 182 million from 158 million, while advertisement-supported revenue rose 31% to 282 million euros.