Spotify Hits 293 Million Premium Subscribers in Q1
- Spotify reported revenue of €4.53 billion on earnings of €3.45 per share.
- Wall Street was expecting revenue of €4.52 billion on earnings of €2.95 per share, per analyst estimates compiled by Yahoo Finance
- Shares of the music streaming giant fell 11.4% in pre-market trading on Tuesday following a weaker than expected outlook
Spotify added 3 million premium subscribers for a total of 293 million globally in its first quarter.
Total monthly active users grew 9% year over year to 761 million, while ad-supported MAUs grew 14% to 483 million. The results were driven by “broad-based regional growth,” led by the Latin America and Europe, as well as Spotify’s Rest of World segment. Premium growth also benefitted from “strong global promotional campaign intake,” while MAU growth was boosted by the global launch of mobile free tier enhancements.
Premium revenue grew 10% to €4.15 billion, driven by subscriber gains and price increases, while ad-supported revenue fell 5% to €385 million. Music advertising was driven by growth in impressions sold, partially offset by “softness in pricing.” Automated sales channels represented over 30% of advertising growth,
Spotify has 7 million podcast titles, over 590,000 video podcast shows and more than 700,000 audiobooks in English language markets available on the platform. Podcasting growth was led by sponsorship gains within Spotify’s Owned & Licensed portfolio.
“We’re well positioned because of our large, engaged user base, deep creator relationships, and years of investment in personalization and infrastructure at scale,” Spotify co-CEO Gustav Söderström said in a statement. “Together, these create a platform that can take advantage of this moment and unlock entirely new growth vectors that will enable us to climb new mountains previously unimaginable. We see significant room to grow across users, formats and engagement and to expand what Spotify is and can become over time.”
Despite the company’s subscriber and revenue growth during the quarter, shares tumbled over 11% in pre-market trading Tuesday on a weaker-than-expected outlook.
Spotify is forecasting that it will add 6 million premium subscribers for a total of 299 million and 17 million MAUs for a total of 778 million. It also anticipates a 14.5% increase in total revenue to €4.8 billion, operating income of €630 million and an operating margin of 33.1%.
During the quarter, Spotify launched a beta for its new Taste Profile feature, which allows Premium users to steer what the see on the company’s homepage. The beta is available in New Zealand with more markets to follow.
It also expanded its Prompted Playlist beta to Premium listeners across the U.S. and Canada, given them a new way to describe exactly what they want to hear using their own words and put meaningful control of the algorithm directly in their hands. The feature has also expanded beyond music to now include podcasts.
Additionally, Spotify launched a beta globally for a new feature called SongDNA, which gives fans an immersive way to explore the writers, producers, collaborators, samples, interpolations, and covers behind the music they love, and a beta in select markets for a feature called About the Song, which brings stories and context directly into the listening experience through short, swipeable cards that explore the meaning behind the music listeners are hearing.
It also introduced Audiobook charts to make it easier for listeners in the U.S. and U.K. to discover what’s popular and trending on Spotify, with weekly rankings of top audiobooks overall and by genre.
More to come…
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