Spotify Technology (SPOT) reported fiscal fourth-quarter earnings on Tuesday that beat expectations. But strong guidance helped boost shares in early trading as the music streaming platform continues to focus on profitability amid a recent price rise and changes to its audio streaming strategy.
The company reported an operating loss of 75 million euros ($80.6 million) in the quarter amid severance pay and real estate-related charges. This was before Update company guidelines Operating losses in the fourth quarter will range between €93 million and €108 million.
The audio giant also guided for strong first-quarter operating income of €180 million, exceeding Wall Street expectations. Spotify reported an operating loss of €231 million in the same period last year.
On the earnings call, Spotify CEO Daniel Ek emphasized the company's latest “efficiency” strategy.
“The hurdle rate for any new type of investment will be much higher than it was before,” he said, adding that Spotify will be more diligent and disciplined in closing previous operations that no longer serve this new mandate.
“This does not mean that the company poses any risk of any kind,” he said. “We simply think: Are there better ways for us to do this?”
The company also saw an uptick in subscriber growth, gross margins, free cash flow, and average revenue per user. Shares rose as much as 11% shortly after the opening bell.
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