Spotify shares drop to record low despite Q1 expectations

By Dean Seal

Shares of Spotify Technology SA fell more than 10% to an all-time low of $96.60 on Wednesday after the company reported first-quarter revenue and monthly active user results that met or exceeded expectations .

The audio streaming giant’s stock was initially higher than its previous close of $110.41 during premarket hours, but began to slide and eventually opened at $97.22.

Spotify recorded 422 million monthly active users in the first quarter of the year, a 19% increase from the same period a year earlier and exceeding company forecasts as well as analysts’ estimates, according to FactSet. .

Total premium subscribers, Spotify’s most lucrative customer segment, rose 15% to 182 million, narrowly missing the company’s guidance and analysts’ expectations. The company said it lost 1.5 million subscribers when it pulled its business from Russia earlier this month.

Revenue for the quarter rose 24% to 2.66 billion euros, with subscription revenue rising 23% to 2.38 billion euros, narrowly beating analysts’ estimates. Advertising revenue rose 31% to 282 million euros, while analysts polled by FactSet were looking for 305.4 million euros.

The Swedish company recorded a profit of 131 million euros, against 23 million euros in the same quarter a year earlier.

Spotify said it expects to add around 14 million new monthly active users in the next quarter, although it will lose around 8 million due to the closure of Russian operations and cancellations of existing users who created new ones. accounts during a service outage last month.

The second quarter should see the addition of 6 million premium subscribers, he said, although he expects to lose 600,000 paid subscribers due to the Russian exit.

The company said it expects profitability in the next quarter to be affected by unfavorable movements in exchange rates as well as aggressive hiring, particularly in research and development, which increased in the first quarter. and will continue on the second.

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