Business

Spotify quarterly revenue beats on subscriber growth

Total monthly active users rose 27% to 345 million; revenue rose 17% to $ 2.61 billion

Photo: REUTERS/Lucas Jackson
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  • Premium subscribers were up 24% from a year earlier;
  • Total monthly active users rose 27% to 345 million;
  • However, Spotify forecast that revenue and paid subscribers would miss Wall Street estimates this quarter due to uncertainty over how long the coronavirus crisis;
  • The company expects quarterly revenue of 1.99 billion to 2.19 billion euros, short of expectations of 2.23 billion.

Spotify beat Wall Street estimates for fourth-quarter revenue on Wednesday, as the music streaming company hit 155 million paid subscribers for its premium service.

Premium subscribers, who account for most of its revenue, were up 24% from a year earlier. Analysts on average were expecting the company to have 153.26 million paid subscribers, according to IBES data from Refinitiv. Total monthly active users rose 27% to 345 million.

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Spotify said the pandemic had had little impact on its subscriber growth, though it may have contributed positively to pulling forward new signups.

Revenue rose 17% to 2.17 billion euros ($ 2.61 billion) for the three-months ended Dec. 31, from 1.86 billion euros a year earlier. Analysts were expecting revenue of 2.15 billion euros, according to IBES data from Refinitiv.

Spotify outlook weakens as pandemic uncertainty persists

Spotify forecast that revenue and paid subscribers would miss Wall Street estimates this quarter due to uncertainty over how long the coronavirus crisis would last and with it a surge in demand for its music streaming.

Shares of the company were down 7% in premarket trading. The company expects quarterly revenue of 1.99 billion to 2.19 billion euros, short of expectations of 2.23 billion.

The company has seen a sharp rise in paid subscribers during the pandemic as people have been locked down at home and in the fourth quarter beat revenue estimates as it hit 155 million paid subscribers for its premium service.

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“We do believe that probably some of the growth in 2021 may have been pulled forward into 2020,” Chief Financial Officer Paul Vogel told Reuters.

Premium subscribers, who account for most of Spotify’s revenue, were up 24% in the fourth quarter from a year earlier, beating estimates of 153.26 million. It, however, expects total premium subscribers in the range of 155 million to 158 million for the first quarter, whereas analysts were expecting it to hit 163.5 million.