Spotify Shares Fall to Record Low Despite Meeting 1Q Expectations
April 27 2022 - 1:24PM
Dow Jones News
By Dean Seal
Spotify Technology SA shares tumbled more than 10% to an
all-time low of $96.60 Wednesday after the company reported
first-quarter revenue and monthly active user results that met or
exceeded its expectations.
The audio-streaming giant's stock was initially higher than its
previous close of $110.41 during premarket hours, but started to
slip and ultimately opened at $97.22.
Spotify recorded 422 million monthly active users in the first
quarter of the year, a 19% rise from the same period a year earlier
and topping the company's guidance as well as analyst estimates,
according to FactSet.
Total premium subscribers, Spotify's most lucrative customer
segment, rose 15% to 182 million, just missing the company's
guidance and analyst expectations. The company said it lost 1.5
million subscribers when it pulled its operations from Russia
earlier this month.
Revenue for the quarter increased 24% to EUR2.66 billion, with
revenue from subscriptions rising 23% to EUR2.38 billion, just
beating analyst estimates. Advertising revenue grew 31% to EUR282
million, where analysts polled by FactSet had been looking for
EUR305.4 million.
The Swedish company posted a profit of EUR131 million, up from
EUR23 million in the same quarter a year earlier.
Spotify said it expects to add about 14 million new monthly
active users next quarter, though it will lose about 8 million from
the closure of Russian operations and cancellations from existing
users who created new accounts during a service outage last
month.
The second quarter should see the addition of 6 million premium
subscribers, it said, though it expects to lose 600,000 paying
subscribers due to the Russia exit.
The company said it expects profitability to be hit next quarter
from unfavorable movements in foreign exchange rates as well as
aggressive hiring, particularly in research and development, that
kicked up the first quarter and will continue into the second.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
April 27, 2022 13:09 ET (17:09 GMT)
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