| 25 June 2024, Tuesday |

Spotify forecasts weak quarter as subscriber growth falters

Spotify Technology SA 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 U.S. 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 2.16 billion euro to 2.36 billion euro range for the second quarter. Analysts expected revenue of 2.27 billion euros.

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% 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 2.15 billion euros for the three months ended March 31, from 1.85 billion euros a year earlier, beating a consensus forecast of 2.14 billion euros.

Total monthly active users rose 24% to 356 million.

  • Reuters