SPOT Spotify Technology SA

By Dean Seal

Spotify Technology SA shares tumbled more than 10% to an all-time low of $96.60 Wednesday after the company reported first-quarter revenue and monthly active user results that met or exceeded its expectations.

The audio-streaming giant's stock was initially higher than its previous close of $110.41 during premarket hours, but started to slip and ultimately opened at $97.22.

Spotify recorded 422 million monthly active users in the first quarter of the year, a 19% rise from the same period a year earlier and topping the company's guidance as well as analyst estimates, according to FactSet.

Total premium subscribers, Spotify's most lucrative customer segment, rose 15% to 182 million, just missing the company's guidance and analyst expectations. The company said it lost 1.5 million subscribers when it pulled its operations from Russia earlier this month.

Revenue for the quarter increased 24% to EUR2.66 billion, with revenue from subscriptions rising 23% to EUR2.38 billion, just beating analyst estimates. Advertising revenue grew 31% to EUR282 million, where analysts polled by FactSet had been looking for EUR305.4 million.

The Swedish company posted a profit of EUR131 million, up from EUR23 million in the same quarter a year earlier.

Spotify said it expects to add about 14 million new monthly active users next quarter, though it will lose about 8 million from the closure of Russian operations and cancellations from existing users who created new accounts during a service outage last month.

The second quarter should see the addition of 6 million premium subscribers, it said, though it expects to lose 600,000 paying subscribers due to the Russia exit.

The company said it expects profitability to be hit next quarter from unfavorable movements in foreign exchange rates as well as aggressive hiring, particularly in research and development, that kicked up the first quarter and will continue into the second.

Write to Dean Seal at dean.seal@wsj.com

(END) Dow Jones Newswires

April 27, 2022 13:09 ET (17:09 GMT)

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