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Spotify subscribers up, stock down

Kerry Flynn
Apr 27, 2022
Illustration of podcast symbol with headphones on and smiling

Illustration: Sarah Grillo/Axios

Spotify reported double-digit percentage growth in paid subscribers and monthly active users in its first-quarter results, but shareholders did not cheer the news.

Why it matters: Despite a controversial quarter that saw Neil Young pull his music in protest of Joe Rogan, Spotify beat analysts' expectations on sales, monthly active users and operating profit, per Bloomberg's compiled estimates, and surpassed most of its own guidance.

By the numbers: Prior to Wednesday's earnings, Spotify's stock had fallen 55% since the start of the year. The stock popped up in pre-market trading but soon fell back down. It was trading down 11% at 10:20am ET on Wednesday.

  • Paid subscribers were up 15% from the year prior to 182 million, even after losing 1.5 million subscribers when Spotify suspended services in Russia.
  • Monthly active users were 422 million, up 19% from the year prior. That number does include 3 million users who created new accounts during an outage in March.
  • Total revenue was €2.66 billion ($2.8 billion), up 24% from the year prior.
  • Operating loss was €6 million ($6.35 million). It posted an operating profit of €14 million ($14.82 million) the year prior.
  • Podcasts on the platform are 4 million, up from 3.6 million last quarter.
Data: Spotify earnings statements; Chart: Axios Visuals
Data: Spotify earnings statements; Chart: Axios Visuals

What they're saying: "Q1 traditionally sees lower new user activations. But despite this, we delivered solid results, and I think this is a testament of our consistency of execution and clearly shows just how compelling our offering remains for creators, users and advertisers," CEO Daniel Ek said on the earnings call.

Yes, but: Spotify fell 1 million short of its own guidance for paid subscribers for the quarter. That miss was affected by its exit from Russia.

What's next: CFO Paul Vogel said Spotify's investment in original content will continue to be "pretty significant over the next couple of years. ... But we also expect the revenue to grow really nicely."

  • "We're always going to look to be developing our own content, acquiring content, licensing content where we see fit, and nothing's changed there," Vogel continued.
  • Spotify's guidance for the second quarter was 428 million monthly active users, 187 million paid subscribers, total revenue of €2.80 billion ($2.96 billion) and an operating loss of €197 million ($208.46 million).
Data: Spotify earnings statements; Chart: Axios Visuals
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