Spotify -6.9% as debut earnings point to losses; 75M paid subs

|About: Spotify (SPOT)|By:, SA News Editor

Spotify (NYSE:SPOT) is down 6.9% after hours, to $157.69, following its first public earnings report (with a forecast of continuing losses ahead) and word that it's hit 75M paying subscribers.

Monthly active users came to 170M in March (up 30% Y/Y); the 75M paid subs were up 45%.

Revenues were up 26% to €1.139B; that's up 37% after adjusting for a negative foreign-exchange impact.

Operating loss was about 4% of total revenue, or €41M. Gross margin topped the high end of guidance at 24.9%.

Premium revenue was €1.037B (up 25%); ad-supported revenue was just €102M, up 38%.

Free cash flow was €74M, on net cash flows from operations of €84M.

It expects to end Q2 at 79M-83M paying subscribers, of a total of 175M-180M; it's reiterating guidance for 92M-96M paying subs at the end of 2018 (up 30-36% Y/Y), part of 198M-208M MAUs (up 26-32% Y/Y).

For Q2, it's guiding to revenue of €1.1B-€1.3B (up 10-29% Y/Y; or up 20-38% excluding foreign exchange impact); gross margin of 24-26%; and an operating loss of €60M to €140M, including expenses from its direct listing of €30M-€35M. For the full year, it still sees revenue of €4.9B-€5.3B (up 20-30%); gross margin of 23-25%; and operating loss of €230M-€330M.

Press release

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