Spotify on Wednesday forecast current quarter paid subscribers below Wall Street estimates, after its first-quarter results beat expectations driven by growth in countries such as the United States and India.
While Spotify has seen a sharp rise in subscribers during the pandemic as people stayed at home due to lockdowns, it faces growing competition from Apple Music, Amazon Music, and a handful of smaller rivals.
Apple has also launched a paid subscription platform, presenting stiff competition to Spotify’s podcast ambitions, where it has put a lot of effort and money to build the business.
Spotify’s podcast range now has millions of podcast titles, including Renegades: Born in the USA featuring former US President Barack Obama and Bruce Springsteen, and The Joe Rogan Experience.
The company expects total premium subscribers in the range of 162 million to 166 million for the second quarter. Analysts forecast it to hit 166.1 million, according to IBES data from Refinitiv.
It forecast total revenue in a EUR 2.16 billion (roughly Rs. 19,400 crores) to EUR 2.36 billion (roughly Rs. 21,200 crores) range for the second quarter. Analysts expected revenue of EUR 2.27 billion (roughly Rs. 20,390 crores).
Spotify, which launched its services in 86 new countries in the first quarter, said growth in the United States, Mexico, Russia, and India offset lower-than-expected growth in Latin America and Europe.
Premium subscribers, which account for most of the company’s revenue, were up 21 percent to 158 million from a year earlier. Analysts on average were expecting the company to have 157.5 million paid subscribers, according to IBES data from Refinitiv. Revenue rose to EUR 2.15 billion (roughly Rs. 19,310 crores) for the three months ended March 31, from EUR 1.85 billion (roughly Rs. 16,620 crores) a year earlier, beating a consensus forecast of EUR 2.14 billion (roughly Rs. 19,220 crores).
Total monthly active users rose 24 percent to 356 million.
© Thomson Reuters 2021