The Spotify logo is reflected on a screen at the New York Stock Exchange on April 3, 2018.Lucas Jackson/Reuters
Spotify Technology SA on Wednesday reported a better-than-expected 31-per-cent jump in paid music subscribers to 130 million and a 22-per-cent rise in revenue in the first quarter, weathering a slowdown in ad sales caused by the spread of the new coronavirus.
Shares of the Swedish music streaming company rose 2 per cent in trading before the bell.
Spotify, which launched its service more than a decade ago and faces stiff competition from Apple Inc. and Amazon.com Inc., earns money by selling music subscriptions and showing ads to free users.
“We are fortunate that as a business we are able to operate with very little disruption and our hope is that providing music, information, and an escape for many can provide some joy and comfort,” the company said in a statement.
For the second quarter, Spotify expects premium subscribers in the range of 133 million to 138 million. Analysts were expecting 136.5 million, according to IBES data from Refinitiv.
It also forecast total revenue in the range of €1.75-billion ($2.65-billion) to €1.95-billion, below expectation of €2.02-billion, according to IBES data from Refinitiv.
Spotify said it started seeing a slowdown in ad sales in the last weeks of March as buyers tightened their purse strings because of the spread of the coronavirus.
First-quarter premium subscribers, however, rose 31 per cent from a year earlier. Analysts were expecting 128.6 million paid subscribers.
Revenue rose to €1.85-billion for the three-months ended March 31 from €1.51-billion a year earlier. Analysts were expecting €1.86-billion.
The company reported a loss attributable to shareholders of €0.20 a share. Analysts were expecting a loss of €0.49 a share.
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