Spotify Quarterly Revenue Beats on Higher Users, Ad Rebound

The top end of the company’s current-quarter forecast for revenue and premium subscribers were also ahead of expectations.

Spotify forecast revenue of 2.31-2.51 billion euros, and 170-174 million premium subscribers. Analysts on average were expecting revenue of 2.39 billion euros and 170.4 million subscribers.

COVID-19 continued to weigh on its performance in several markets, but revenue from its ad business, which last year took a hit due to the pandemic, grew 110% to 275 million euros.

Spotify has also been investing heavily in its podcast business to rival that of Apple and in April launched a paid subscription platform for podcasters in the United States.

The company currently has 2.9 million podcasts on its platform and podcast share of overall consumption hours reached an all-time high in the quarter.

Its podcasts by personalities such as Joe Rogan and Bill Simmons continue to draw more users. Revenue rose to 2.33 billion euros ($2.75 billion) for the quarter from 2.15 billion a year earlier, above the 2.29 billion expected by analysts, IBES data from Refinitiv showed. Premium subscribers, which account for most of the company’s revenue, hit 165 million, matching analysts’ expectations.

Total monthly active users rose 22% to 365 million.

The company reported a net loss of 20 million euros, or 19 euro cents per share, improving on a loss of 356 million euros or 1.91 euros per share a year earlier and beating the loss of 37 euro cents expected by analysts.

Spotify shares were up 3.5% in premarket trading.

($1 = 0.8460 euros)

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm, editing by Helena Soderpalm and Jason Neely)

British Fintech Giant Wise Starts Solidly After Debuting On The Stock Market

Wise launched on the London Stock Exchange earlier today and is already performing excellently. Analysts are optimistic that Wise’s listing on the market could serve as a boost to the London tech community.

Wise Now A Publicly Listed Company

Wise, formerly known as Transferwise, has become a publicly listed company. The London-based company went public via a direct listing method instead of the conventional initial public offering (IPO).

The direct listing method has become popular since Spotify debuted it in 2018. Via this listing method, the private backers are selling their existing shares to the public instead of raising money using an IPO. Leading cryptocurrency exchange Coinbase also went public via the direct listing method a few months ago.

Spotify stock chart. Source: FXEMPIRE

Wise’s stock began trading at a modest £8 a share at 11 a.m. London time and it is currently trading around £8.40. The company is currently valued above £8 billion ($11 billion). The listing is considered a milestone event in the UK as the country looks to become a global tech hub after withdrawing from the European Union.

The company would be looking to fare better than Coinbase. The cryptocurrency exchange’s stock price has plummeted in recent months, and it is currently trading at $237 per share, down from its high of $429 in April.

UK’s Fintech Community is Growing

The United Kingdom is becoming home to some of the world’s leading fintech companies. Wise is one of the most popular fintech unicorn companies to emerge from the UK in recent years. The UK has produced other multibillion-dollar firms, including Revolut and

Following Wise’s listing on the London Stock Exchange, the firm launched a program called OwnWise. The program allows its users to own a stake in the company, and participants in the scheme would get to enjoy bonus shares worth up to a maximum of £100 after 12 months. It is an unusual move because if people intend to own a stake in the company, the best way to achieve it would be to buy some of the company’s shares.

Storytel Signs Audiobooks Partnership with Spotify, Shares Jump

By Supantha Mukherjee

Storytel offers listening and reading of more than 500,000 titles across 25 markets and competes with the likes of Amazon’s Audible.

“We think this is a great partnership and a way to get access to more potential audiobook listeners around the world,” CEO Jonas Tellander told Reuters. “We are growing at about 30% annually and we are hoping that this will contribute a lot to that.”

Spotify recently tied up with Facebook to allow listeners to play music and podcasts directly from the social network’s iOS and Android apps.

Storytel has books in 30 languages but is restricted to the country a subscriber is in and the kind of credit cards they use. Spotify is available in more than 150 countries and have 356 million total monthly active users.

Storytel, which has roughly 1.6 million subscribers, is working to make its books available in different countries as it has worldwide rights for most of the audiobooks in several languages, Tellander said.

However, to access the audiobooks, Spotify subscribers would still need a Storytel subscription.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm; editing by Niklas Pollard)

Spotify Shares Fall After Muted Paid Subscriber Growth Forecast

By Supantha Mukherjee

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.

“Some markets are more advanced in recovering, some are still very much in the sort of pandemic landscape and I think that’s going to play out over the course of the year,” Chief Executive Daniel Ek said in an interview.

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.

Ek said he was encouraged by the pent up demand seen in new markets. “This is the sort of next billion user opportunity that we are seeing the early inklings of,” he said.

The company launched several products in the quarter, partnered with Facebook and unveiled a paid podcast subscription platform, a week after Apple.

Spotify has put a lot of effort and money to build the business and 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, with consensus forecasts pitched at 166.1 million, according to IBES data from Refinitiv.

The quarterly subscriber guidance seems achievable, especially as the pandemic continues to drive demand for audio content, said Alexandre Jornod, an analyst at Futuresource Consulting.

It forecast total revenue in a 2.16 billion euro to 2.36 billion euro range with analysts consensus estimate at 2.27 billion euros.

First quarter premium subscribers 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, beating expectations.

(Reporting by Supantha Mukherjee in Stockholm; editing by Emelia Sithole-Matarise and Elaine Hardcastle)

Spotify Under Pressure After Another Losing Quarter

Spotify Technology S.A. (SPOT) is trading lower by 8% on Wednesday despite reporting a better-than-expected Q1 2021 loss and meeting revenue estimates. The European streaming platform lost  €0.25 per share during the quarter, €0.18 better than estimates, while revenue grew 16.2% year-over-year to €2.15 billion, right on consensus. Revenue has shown no acceleration in the last five quarters, despite the pandemic and well-publicized content deals.

A Sea of Red Ink

And the company keeps losing money. According to an industry publication, the service lost the equivalent of $2.2 million every day in 2020 while spending over $1 billion on sales and marketing. Meanwhile, Monthly Average User (MAU) data for the latest quarter raises fresh doubts about the quest for profitability, with 24% year-over-year growth “modestly below our internal expectations” due to weakness in Latin America and Europe.

However, Spotify still has loyal fans on Wall Street. Jefferies analyst Andy Uerkwitz posted a Buy rating and $360 target last week, noting “Spotify is more platform than streaming service. The subtle differences are platforms have stickier customers, less likely to be disintermediated by new technologies, and longer tail of growth/margin expansion. We believe we are in the early innings of a creator economy where content creation/distribution/marketing has been democratized, in which Spotify will become the primary audio platform for creators.”

Wall Street and Technical Outlook

Wall Street consensus now stands at an ‘Overweight’ rating based upon 13 ‘Buy’, 13 ‘Hold’, and 2 ‘Underweight’ recommendations. Three analysts recommend that shareholders close positions and move to the sidelines. Price targets currently range from a low of $300 to a Street-high $450 while the stock is set to open the U.S. session nearly $75 below the median $345 target. It’s obvious from this disconnect that Main Street investors would rather own profitable companies.

Spotify came public on U.S. exchanges in the 160s in April 2018 and topped out near 200 in July. It mounted resistance in June 2020 and took off on a two-legged uptrend that posted an all-time high at $387.44 in February 2021. The stock fell more than 35% into the end of March and bounced at the 200-day moving average while price action into this week’s report continues to test that critical support level.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication. 

Spotify Launches Podcast Subscription Platform to Challenge Apple

A podcaster could mark episodes as subscriber-only and publish them on Spotify and other podcast listening platforms, the company said in a statement.

Spotify, the world’s most popular paid music streaming service, said it won’t take a commission from podcast creators’ subscriber revenue for the next two years, and planned to charge a 5% fee starting in 2023.

Online stores such as Apple’s app store usually charge developers a fee for purchases made on their platforms.

Spotify filed a complaint two years ago with European Union regulators saying that the fees Apple charges for taking payments through the store had made it unfairly difficult for rivals to compete for music subscribers.

Apple competes with Spotify for music streaming and earlier this month unveiled’s%20acquisitions%20include%20about%20%24340,offers%20advertising%20technology%20for%20podcasts a subscription platform that will cost $19.99 per month and will provide creators the tools they need to offer podcast subscriptions.

Spotify has selected 12 independent podcasters to publish subscriber-only bonus content in their existing podcast feeds, and the company will also expand the programme to more creators over the coming months.

National Public Radio (NPR) will publish five ad-free shows for paid subscribers from May 4, including “How I Built This with Guy Raz” and “Planet Money”.

Spotify has been boosting its podcast muscle by spending more than half a billion dollars in buying podcast networks Gimlet and Anchor, and podcast ad company Megaphone.

The new subscription tool is built using Anchor’s platform.

The Swedish company is also testing a system where content publishers on other platforms with existing subscriber bases can deliver paid content using Spotify.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent; Editing by Emelia Sithole-Matarise)

Spotify’s New Tie-Up to Allow Listeners Play Music, Podcasts from Facebook App

Facebook last week said it planned to launch several audio products, including Clubhouse-style live audio rooms and a way for users to find and play podcasts.

The new integration is rolling out in 27 markets, including the U.S. and Canada, with additional markets to follow in the coming month, Spotify said in a statement.

Spotify’s paid subscribers would be able to access full playback without advertisements without leaving the Facebook app.

Apple last week said it will launch podcast subscriptions, which will let users pay to unlock new content and additional benefits like ad-free listening, intensifying competition with Spotify.

Both Spotify and Facebook have been fighting Apple on different fronts, from privacy changes on iOS devices to the 30% fee levied on app developers to use the iPhone maker’s in-app purchase system.

Apple has said its App Store helped Spotify to benefit from hundreds of millions of app downloads to become Europe’s largest music streaming service.

(Reporting by Supantha Mukherjee, European Technology & Telecoms Correspondent, based in Stockholm; Editing by Kirsten Donovan)

Spotify Buys Locker Room App’s maker Betty Labs in Live Audio Push

By Elizabeth Culliford

New voice-based platforms, including invite-only social app Clubhouse, have seen rapid growth in recent months during the COVID-19 pandemic. Locker Room, launched in October 2020, became a popular spot for sports fans to chat and hold watch parties.

The music-streaming service said in the coming months it would “evolve and expand” Locker Room to offer sports, music, and cultural programming as well as live discussions with professional athletes, musicians and other personalities.

“Creators and fans have been asking for live formats on Spotify, and we’re excited that soon, we’ll make them available to hundreds of millions of listeners and millions of creators on our platform,” said Gustav Söderström, Chief Research & Development Officer at Spotify.

Spotify did not disclose the cost of the acquisition. Betty Labs was initially backed by Lightspeed Venture Partners and later by GV, Alphabet Inc’s venture capital arm, and Precursor Ventures. Last October, Betty Labs raised $9.3 million in seed funding led by GV.

“We are excited to join forces with Spotify and continue building the future of audio – we’ll invest more in our product, open the experience to Spotify’s audience, diversify our content offerings, and continue expanding the community we’ve built,” said Betty Labs founder and CEO Howard Akumiah.

Spotify has also been making a push into podcasting, and has spent hundreds of millions of dollars to boost its podcast range and debuted a podcast advertising marketplace.

Screenshots shared by a Twitter user last week showed Spotify was surveying some users about how often they used Clubhouse. Twitter Inc is also testing a live audio app Spaces, which it plans to publicly launch by April, and Facebook Inc is reportedly dabbling with its own live audio offering.

(Reporting by Elizabeth Culliford; Editing by Kenneth Li and Sonya Hepinstall)

Spotify Red Ink Could Trigger Selloff

Luxembourg’s Spotify Technology S.A. (SPOT) reports Q4 2020 earnings in Wednesday’s pre-market, with analysts expecting the European music service to report a loss of $0.55 per-share on $2.15 billion in revenue. If met, earnings-per-share (EPS) will mark a 50% loss reduction compared to the same quarter in 2020. The stock sold off more than 4% in October after missing Q3 top and bottom line estimates, even though revenue grew 14% year-over-year.

Profits Still Elusive

The musical disruptor is growing rapidly but not booking profits, posting losses in the last four quarters despite healthy revenue expansion. In turn, this failure is undermining bullish sentiment about the service’s long-term outlook. The pandemic has compounded this bearish view because, theoretically at least, lockdowns and stay-at-home orders should have super-charged Spotify’s earnings-per-share growth since March 2020.

Spotify invests in new markets that should generate healthy revenue streams in coming quarters but these initiatives will continue to pressure EPS in the short-term. It just launched the service in South Korea, which is the sixth largest musical market in the world. As the company noted in a Feb. 1 release, the share of K-Pop listening on the platform has increased by more than 2,000% since it debuted the first K-Pop playlist in 2014.

Wall Street and Technical Outlook

Wall Street consensus has deteriorated in the last three months, dropping to a ‘Hold’ rating, based upon 11 ‘Buy’, 1 ‘Overweight’, 10 ‘Hold’, and 1 ‘Underweight’ recommendation. More importantly, 6 analysts recommend that shareholders close positions and move to the sidelines. Price targets now range from a low of $310 to a Street-high $428 while the stock opened Tuesday’s U.S. session more than $23 below the median $363 target.

Spotify broke out above July 2020 resistance at 299.67 in December 2020 and posted an all-time high at 370.95 on Jan. 13. The stock closed at the 50-day moving average on Monday, after falling 16%, and bounced into the 340s in Tuesday’s session. The On Balance Volume (OBV) accumulation-distribution indicator topped out in July 2020 and has gone comatose since October, suggesting that short-term catalysts will generate out-sized reactions.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Spotify Could Offer Profitable Pullback Play

Spotify Technology S.A. (SPOT) sold off in October after missing Q3 2020 top and bottom line estimates, booking a loss of €0.58 per share on 14.1% year-over-year revenue growth to €1.98 billion. Buyers returned in November in reaction to a host of initiatives that included the acquisition of a podcast advertising platform, 2021 South Korean launch, and Spotify 2020 Wrapped, providing a year-end review of the user’s ‘listening moments’.

Impressive User Growth

Investors also shook off the bad quarter due to impressive growth metrics, with monthly average users (MAUs) rising 29% year-over-year to 320 million, above the top end of previous guidance.  North America and Europe provided the majority of users but the company also reported 30% growth in Latin America and 50% growth in the ‘Rest of the Word’, opening channels that will support higher advertising revenue in coming quarters.

Monness Crespi and Hardt Analyst Brian White raised his Spotify target from $310 to $380 on Wednesday, noting “After battling lackluster investor sentiment in 2018 and 2019, the Spotify story came to life in 2020 as its podcast push gained momentum and the value of the platform became better appreciated, resulting in a reinvigorated stock. We believe Spotify has further upside and are raising our 12-month price target.”

Wall Street and Technical Outlook

Wall Street consensus is mixed due to quarterly losses, with a ‘Moderate Buy’ rating based upon 9 ‘Buy’ and 5 ‘Hold’ recommendations. More importantly, three analysts believe Scottify is over-valued and recommend that shareholders close positions. Price targets currently range from a low of $181 to a Street-high $380 while the stock opened Wednesday’s session more than $25 above the median $294 target. Positive catalysts may be needed to support higher prices, given this placement.

Spotify broke out above 2018 resistance near 200 in June 2020 and stalled just below 300 in July. It broke out above that resistance level in December, after failed September and October attempts, and posted an all-time high at 346.77 on Dec. 11. Price has been pulling back in a flag pattern since that time and could offer a buying opportunity at breakout support, which has narrowly aligned with the 50-day moving average.

For a look at all of today’s economic events, check out our economic calendar.

Disclosure: the author held no positions in aforementioned securities at the time of publication.

Spotify On The Defensive After Mixed Quarter

Luxembourg’s Spotify Technology S.A. (SPOT) posted a fiscal Q3 2020 loss of €1.91 in July, much worse than €1.45 estimates. Revenue at the digital entertainment upstart increased 13% year-over-year to €1.89 billion, which also missed consensus expectations. Monthly Average User (MAU) statistics offered a bright spot in an otherwise bearish quarter, growing  29% year-over-year, but inline Q4 guidance gave sidelined investors no reason to jump on board.

Spotify Posts Three Quarterly Losses in 2020

The streaming service has posted losses in the last three quarters even though revenues have booked double-digit growth. In turn, this is raising doubts on Wall Street about long-term profitability. This is especially true after a pandemic wave that, theoretically at least, should have underpinned earnings-per-share expansion, due to quarantine and stay-at-home orders that gave potential customers more time to access all sorts of entertainment offerings.

Spotify filed an anti-competitive complaint against Apple Inc. (AAPL) in 2019, alleging the 30% fee demanded by the tech giant to display the app “tilted the playing field”’ by “placing unfair restrictions on marketing and promotions that benefit consumers.” Messaging app Telegram joined the complaint last month, at the same time that popular video game Fortnite was removed from the Apple Store after parent Epic Games attempted to bypass the fee. Apple Music just added global offerings that appear, at first glance, designed to punish the company for the filing.

Wall Street And Technical Outlook

Wall Street consensus rates the stock as a ‘Moderate Buy’ based upon 12 ‘Buy’, 7 ‘Hold’, and an awkward 4 ‘Sell’ recommendations. A wide range of price targets highlights broad disagreement among analysts about Spotify’s long-term outlook, with a low of $172 and a street-high $357. The stock is currently trading about $13 above the median $266 target in a placement that will make it harder to add to gains in the third quarter.

Spotify posted an all-time high at 299.67 on July 22 and sold off into the 240s in mid-August. Those extremes now mark the edges of a broad trading range that may contain price action into the fourth quarter, when investors will get another look at the company’s balance sheet. Accumulation-distribution readings haven’t budged since topping out at a new high a few days after price, reinforcing a holding pattern that reflects growing caution.