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Fast Growth, Losses Continue as Spotify Eyes IPO

As eyes turn to a potential Spotify public offering next year, the company’s recent financial performance might bolster its case to investors. But questions about profitability remain.

The music streaming service recorded revenue of 1.9 billion euros ($2.2 billion) in the first half of this year, according to two people briefed on the numbers, putting it on pace for about 4.1 billion euros in 2017. That would be about 40% higher than last year’s revenue. Spotify again recorded a significant operating loss, of between 100 million and 200 million euros in the first half of the year, according to one of the people briefed on the numbers, which the company shared with investors. But one important metric of profitability, gross margins, improved.

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Spotify isn’t required to report its 2017 financial results to European regulators until the middle of next year, or to U.S. regulators until it files to go public. The select figures it provides periodically to investors might differ from finalized and audited statements filed with regulators.

-- Serena Saitto contributed to this article.

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