Spotify forecast on Wednesday weaker than expected subscriber expectations for the current quarter, sending its shares down 15 per cent in late trade.
The outlook overshadowed fourth-quarter revenue, which came in higher than analysts’ estimates, as the music streaming company sold more advertisements and newer services such as podcasts, while recording a healthy 16 per cent increase in paid subscribers for its premium service.
Total monthly active users rose 18 per cent to a record 406 million.
The company, however, forecast current-quarter paid subscribers of 183 million, below expectations of 184 million. Revenue is expected to meet estimates of €2.6 billion.
The subscription music streaming service has invested over a $1 billion in the podcasting business, led by marquee exclusive shows such as The Joe Rogan Experience.
But the allure of the podcast star also drew condemnation after his show aired controversial views around Covid-19, drawing protests from artists Neil Young and Joni Mitchell.
Rogan, a popular internet commentator, has since apologised and Spotify said it would start adding content advisories to episodes discussing Covid.
Spotify said podcasts’ share of overall consumption hours on its platform reached an all-time high and it expanded its paid podcast subscriptions in 33 more markets and enabled podcasts for users in Russia, Egypt and Saudi Arabia.
Premium subscribers, which account for most of the company’s revenue, rose to 180 million, beating analysts’ expectations of 179.9 million.
Quarterly revenue rose to €2.69 billion from €2.17 billion a year earlier, and above the €2.65 billion expected by analysts, according to IBES data from Refinitiv. – Reuters