Spotify Shares Fall In Premarket Amid Signs Subscriber Growth Is Slowing

<div id=”js-article__body” itemprop=”articleBody” data-sbid=”WP-MKTW-0000248804″>

Shares of music streaming platform Spotify fell 7% in the previous New York market on Wednesday, after the company’s first-quarter earnings showed signs that subscriber growth is slowing amid a Greater competition from Big Tech rivals. Spotify SPOT, -1.71% added 3 million premium subscribers in the first three months of 2021, but fell short of expectations on the number of monthly active users and reduced its targeting for users. monthly throughout the year.

The Stockholm, Sweden-based company said monthly active users, a key metric, grew to 356 million in the first three months of 2021, an increase of 24% compared to the same period in 2020. This figure came close to the minimum of the previous company. Guided range of 354 million to 364 million, and in a statement Spotify said it was “modestly below our internal expectations.” The metric also missed Wall Street expectations of more than 360 million, according to the FactSet consensus. Growth was best among users who paid for Spotify’s ad-free service. Spotify added 3 million of these users in the first quarter to reach 158 million premium subscribers, an increase of 21% over the same period in 2020. This slightly exceeded the Wall Street consensus of 157 million premium subscribers. Also read: Spotify is raising prices for many US and UK subscriptions this week, but there are signs that growth is slowing as Spotify faces increased competition from Big Tech rivals that are They are approaching the music streaming group business. The company said it expects monthly active users in the second quarter of 2021 to be within a range of 366 million to 373 million, disappointing Wall Street, which was expecting a figure close to 378 million. Spotify expects a range of 162 million to 166 million premium subscribers in the second quarter, setting the bar high to meet the Wall Street consensus of 166 million. Spotify also lowered its full-year guidance for monthly active users, saying it now expects to have between 402 million and 422 million, after projecting a range of 407 million to 427 million at the end of the fourth quarter. However, the group’s guidance on premium users remains unchanged and slightly increased its revenue expectations for the full year. “Given the extraordinary operating circumstances we currently face regarding the impact of COVID-19, there is a greater likelihood of variances from those ranges than typical quarters,” the company said. Additionally: Apple will face historic antitrust charges over Spotify’s complaint this week, Spotify reportedly seeing skyrocketing user growth through the COVID-19 pandemic as millions of homebound people turned to platform entertainment. digital. But the group faces increasing pressure from bigger rivals in Big Tech, such as device maker Apple AAPL, -0.24% and online retailer Amazon AMZN, + 0.25%. A pioneer in streaming music, Spotify is also making its way into podcasts. Spotify said that the number of hours users listened to podcasts increased sharply since the fourth quarter of 2020, with podcast activity in March reaching an all-time high in terms of the proportion of total listening hours. The group said that the podcast “The Joe Rogan Experience” in particular performed above expectations with regard to onboarding new users. “Renegades: Born in the USA,” featuring former President Barack Obama and musician Bruce Springsteen, was Spotify’s second-largest podcast in March and its most international show to date, the company said. In basic financial metrics, Spotify reported first-quarter revenue of € 2.1 billion on Wednesday, a 16% increase from the same period last year, but a 1% decrease from the fourth quarter of 2020. The company had a net income of 23 euros. million in the quarter, compared to 1 million euros in the same period of the previous year.