Spotify Technology said on Wednesday that music streaming demand has rebounded from the coronavirus-related weakness. At the beginning of the quarter, its paying subscribers reached 138 million, exceeding Wall Street’s estimates.

However, the company’s quarterly revenue did not meet analysts’ expectations, mainly due to the spread of the pandemic that discouraged advertisers, and ad support revenue fell 21%.

The Swedish company’s has risen about 80% since the beginning of the year, and fell 3% before the market opened to US$253 (about 18,900 rupees).

Spotify is ahead of competitors such as Apple and Amazon and leads the music streaming market. It makes money by paying subscriptions and showing ads to non-paying users.

Premium subscribers account for most of the company’s revenue, an increase of 27% over the same period last year. According to Refinitiv’s IBES data, analysts on average expect the company to have 136.4 million paying users.

The world’s largest music streaming service also reassures investors that people will no longer commute and will not have a profound impact on finances, and it will achieve its full-year goal.

The company said in a statement that the strength of North America and other far offset the slow start of the quarter, and the momentum of improvement in the second half of the quarter continued into the third quarter.

The total number of premium subscribers in the third quarter is expected to be in the range of 140 million to 144 million, higher than the 141.4 million expected.

Spotify also forecasts total revenue in the third quarter between 1.85 billion euros (approximately Rs 16,216 crore) to 2.05 billion euros (approximately Rs 1,968 crore). Analysts expect it to be 2.01 billion euros (about 17.62 billion rupees).

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In the three months ended June 30, revenue increased by 13% to 1.89 billion euros (approximately Rs 16,571 crore), but it fell short of the 1.93 billion euros (approximately Rs 16,925 crore) expected by analysts.

The net loss attributable to Spotify was 356 million euros (about 31.21 billion rupees), or 1.91 euros (about 167 rupees) per share, compared with 76 million euros (42 euro cents) in the same period last year. Analysts had expected the company to lose 45 Euro cents.

The larger loss was mainly due to social charges-payroll related to Swedish employee benefits, which increased as the company’s price rose.

© Thomson Reuters 2020