music streaming demand returned from the coronavirus-related slump that hit the first quarter and Spotify’s paying users topped 138 million, well ahead of Wall Street projections.
Advertising revenue fell by 21% as the epidemic progressed, causing the company’s quarterly revenue to fall short of analysts’ expectations.
Before the market opened, the stock of the Swedish corporation, which has increased almost 80 percent since the beginning of this year, dropped 3 percent to $253 (about Rs. 18,900).
Streaming music service Spotify, which has a significant lead over competitors such as Apple and Amazon, makes money both from paid subscribers and from non-paying users who see adverts on the platform.
Subscribers to the company’s premium service increased by 27% year over year. On average, IBES statistics from Refinitiv showed that the corporation had 136.4 million paid subscribers.
It also reassured investors that people no longer driving to work would not have a significant and long-lasting impact on the company’s profitability and that it would meet its full-year targets.
Despite the sluggish start to the quarter, the business stated in a statement that North America and other regions of strength more than made up for it, and that momentum has continued into the third quarter.
It anticipates 140 million to 144 million total premium customers for the third quarter, which is higher than the 141.4 million projections.
Spotify also expects third-quarter revenue to be between EUR 1.85 billion and EUR 2.05 billion (approximately Rs 16,216 crores). EUR 2.01 billion was predicted by the analysts (roughly Rs. 17,620 crores).
The three months ending June 30 saw a 13 percent increase in revenue to EUR 1.89 billion (approximately Rs. 16,571 crores). However, analysts had expected EUR 1.93 billion (roughly Rs. 16,925 crores).
A year ago, Spotify reported a net loss of EUR 356 million (approximately Rs. 3,121 crores), or a loss of EUR 1.91 per share (about Rs. 167). A 45-cent loss was expected by analysts.
Payroll taxes in Sweden linked to employee benefits, which rise in value as the stock price of a firm rises, was a major factor in the overall loss.
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