Spotify hits 293m premium subscribers

Spotify ended the first quarter with 293 million Premium subscribers and 761 million monthly active users, and investors still sent the stock sharply lower Tuesday. (newsroom.spotify.com) (cnbc.com) The company said Premium subscribers rose 9% from a year earlier, monthly active users climbed 12%, and total revenue reached €4.53 billion in the quarter ended March 31. (newsroom.spotify.com) (cnbc.com) Operating income hit €715 million, a quarterly record, while gross margin improved to 33%. Spotify said Premium revenue rose 10% to €4.15 billion. (newsroom.spotify.com) (thewrap.com) The pressure point was the outlook. Spotify told investors it expects second-quarter operating income of €630 million, below the roughly €680 million analysts were looking for, and guided to 299 million Premium subscribers. (cnbc.com) (thewrap.com) That guidance landed badly even though Spotify’s user forecast was stronger. The company said it expects 778 million monthly active users in the current quarter, up 17 million sequentially. (cnbc.com) (thewrap.com) The ad business showed the split inside Spotify’s model. Ad-supported monthly active users rose 14% to 483 million, but ad-supported revenue fell 5% to €385 million as music advertising pricing stayed soft. (thewrap.com) (billboard.com) Spotify said growth came from broad regional gains, led by Latin America, Europe and the rest-of-world segment, with free-tier product changes helping lift listening and viewing in markets including the United States. (thewrap.com) (newsroom.spotify.com) The company also kept leaning on price increases to lift the subscription business. CNBC noted Spotify raised its U.S. individual plan to $12.99 a month in February. (cnbc.com) By midday Tuesday, the market was treating Spotify’s near-300 million subscriber milestone as secondary to the weaker profit outlook. Shares were down more than 13% after the open. (cnbc.com)