Spotify plans to spend upto $1 bn to repurchase its own stock

The music streaming company, Spotify has declared that it will spend upto $1 billion between now and April 21, 2026 to repurchase its own shares.

In the beginning of the third quarter of 2021, the company will start a stock repurchase programme.

"Repurchases of up to 10,000,000 of the Company's ordinary shares have been authorised by the Company's general meeting of shareholders, and the Board of Directors approved such repurchases up to the amount of $1.0 billion. The authorisation to repurchase will expire on April 21, 2026," it said in a statement.

The timing and repurchasing of the actual number of shares will be based on various factors which includes price, general business and market conditions, and alternative investment opportunities.

"The repurchase programme will be executed consistent with the Company's capital allocation strategy, which will continue to prioritise aggressive investments to grow the business," the company added.

"This announcement demonstrates our confidence in Spotify's business and the growth opportunities we see over the long term," said Paul Vogel, Chief Financial Officer at Spotify.

"We believe this is an attractive use of capital, and based on the strength of our balance sheet, we continue to see ample opportunity to invest and grow our business."

Spotify in its June quarter has announced that it has 165 million premium subscribers and 365 million monthly active users.

It's a year-over-year increase of 20% and 22%, respectively, and up from the 158 million subscribers and 356 million MAUs reported in the last quarter.

"Q2 was a strong quarter for Spotify overall, with the majority of our major metrics performing better than expected," Daniel Ek, Spotify CEO and founder, said.

The company, presenting its June quarter earnings, said that it added seven million subscribers in Q2, which drove healthy double digit year-over-year growth across all regions.

Spotify also said that the revenue of 2,331 million euros grew 23% year-over-year in Q2 and was toward the top end of guidance range due to significant advertising strength and subscriber outperformance.