Spotify Technology SA added more subscribers than analysts predicted last quarter, a sign more consumers are listening to music and podcasts following a lull brought on by COVID-19 lockdowns.

-The world’s largest streaming audio service added 21 million monthly active users in the third quarter, bringing its total to 320 million. That compared to about 316 million estimated by a consensus of analysts compiled by Bloomberg

-Total revenue was up 14 per cent over last year to 1.98 billion euros (US$2.32 billion). Analysts tracked by Bloomberg expected between 1.93 billion euros and 2.24 billion euros.

Key Insights

-The pandemic took a toll on music consumption earlier this year when consumers around the world stopped traveling or commuting. But listening began to rebound in May, spurring optimism that the industry can bounce back.

-Spotify said listening has recovered “to normal usage.” including in-car listening hours that are now above pre-pandemic levels

-Spotify said new music releases on the platform during the third quarter were up 13 per cent compared to the prior quarter, led by Taylor Swift’s “Folklore” album, which set a record for the most first day album streams by a female artist.

-Podcast listenership also suffered during the pandemic, but Spotify sees it as a major source of growth in the long term. It’s been signing exclusive deals for podcasts from Joe Rogan, Michelle Obama and Kim Kardashian, and investors have been betting that the streaming giant can be a major player in the still-nascent industry. The company said 22 per cent of its monthly active users listened to a podcast during the third quarter, up for 21 per cent in the second.

Market Context

• Spotify shares have climbed 85 per cent this year through Wednesday’s close, driven in part by its push into podcasts.​