Spotify beats expectations to cross 500 million user mark as Q1 loss widens
Music streaming giant Spotify said on Tuesday it had 515 million monthly active users at the end of March, beating expectations as its operating loss steepened.
The Swedish company also saw the number of paid subscribers jump to 210 million.
Analysts polled by Factset expected total monthly active users to average around 501 million and paid subscribers to reach 207 million.
Spotify said in a statement that it posted its “strongest” first quarter “since its IPO in 2018”, with almost all performance indicators “exceeding expectations”.
The company also recorded an operating loss of 156 million euros (about 1409 crore rupees) in the first quarter, compared to an operating loss of 6 million euros (about 54 crore rupees) a year earlier. .
The widened loss was, according to the company, attributed to a higher workforce compared to the previous year and the evolution of social charges.
In January, following similar moves by other tech industry giants, the streaming giant announced it was cutting around 600 out of around 10,000 jobs. Its operating expenses also increased due to the expenses related to severance pay.
Boosted by the growing number of users, revenue – the majority of which comes from paid subscribers – increased by 14% to €3 billion (about Rs 27,082 crore).
But that fell short of analysts’ expectations of 3.4 billion euros (roughly Rs. 30,694 crore).
The platform has only occasionally posted a quarterly profit since its launch and has consistently posted annual losses, despite strong subscriber growth and a head start on rivals such as Apple Music and Amazon Music.
For the whole of 2022, it recorded a net loss of €430 million (approximately Rs 3,882 crore), compared to a loss of €34 million (approximately Rs 306 crore) in 2021.
Spotify has also invested more than €1 billion (about Rs 9,028 crore) in podcasting in recent years, but analysts say the company has yet to prove the investment pays off.
His podcast venture has also been a source of controversy, with US star Joe Rogan accused of spreading misinformation on his shows.
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