Sony has sold half of Spotify stock holding
- Author: Eleanor Harrison May 03, 2018,
May 03, 2018, 9:31
Spotify lost 169 million euros, or 1.01 euros per share, in the first quarter, narrowing from a loss of 173 million euros at the same time past year.
Despite meeting several targets, Wall Street investors expressed their disappointment with the results, a response some analysts claim is exaggerated. Revenue aside, the company posted a loss of about $49 million for the quarter.
Heading into earnings, Wall Street's concern over its heavy losses - Spotify lost $500 million a year ago - had been offset, so far, by investor enthusiasm for the world's largest streaming platform, with shares running from $132 to $170 in the last month.
In a letter to shareholders on Wednesday, Spotify noted that the International Federation of the Phonographic Industry says the global recorded music market was worth $17.3 billion in 2017, up 8 percent over 2016, and that streaming now accounts for 38 percent of the total - the single best revenue source.
Expectations for the full 2018 year remain unchanged, with 198-208 million total monthly active users including 92-96 million Premium subscribers.
Operating loss guidance: €60 million to €140 million for the second quarter. The good news, though, is that Spotify's subscriber base continues to impress, even as the Swedish-based company faces increased competition from Apple.
The Luxembourg-based company's results were weighed down by a sequential decline in advertising revenue and slow growth in subscription revenue. Interestingly, it appears that the cumulative number of paid subscribers on Spotify is growing faster than the cumulative number of active users.
Spotify did show improvement on its costs, though. First-quarter revenue also fell shy of analysts' average forecasts.
Spotify's gross margin was above its guidance range at 24.9 percent in Q1, topping its expectations of 23-24 percent. A big cut in marketing expenses helped the company lower its overall costs.