Spotify hits 75 million paid subscribers; Wall Street unimpressed

Spotify hits 75 million paid subscribers; Wall Street unimpressed

Spotify hits 75 million paid subscribers; Wall Street unimpressed

The company initially offloaded 17.2% of Sony Music Entertainment's holding on the first day of the IPO on the New York Stock Exchange and has now confirmed it has since sold a further 32%.

The company forecasted growth year over year of 10% to 29% during the current quarter but that was not a huge jump from its growth rate of 26% it reached during the first three months of 2018. As well, the company predicts €1.1-€1.3 billion in total revenue, gross margin of 24-26 percent and an operating loss of €60-€140 million.

After a robust debut on the market last month, Spotify share prices tumbled in after-hours trade Wednesday.

As well, the company reported net losses of €169 million in its first quarter - a 2.3 percent improvement from the €173 million net loss reported the year prior.

Sony Music, like WMG and UMG, received stock in lieu of some early royalty payments and advances from Spotify.

Average revenue per user for Q1 fell to 4.72 euros, versus 6.84 euros back in 2015.

Spotify's Gross Margin was 24.9 percent in Q1, over the top of its guidance range of 23-24 percent.

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Amazon Music has not provided exact subscriber numbers, however, affirms subscriptions grew over 100% within the last six months to "tens of millions of paid customers". Excluding currency effects, Spotify expects revenue growth of 20 percent to 38 percent.

The figures marked a growth of four million paying subscribers and nine million free users since the start of 2018.

"It looks like there may be too many discounts and too high a percentage of premium subs may be in for the cheaper family and student plans", Mogharabi said.

Revenue aligned with Spotify's previous guidance of 1.1 billion euros - 1.15 billion euros, however, fell below Reuters analyst expectations for 1.143 billion euro. Spotify predicted it will end the period with 79 million to 83 million subscribers.

As at March 31st, Spotify states it has 170 million active monthly users - a 30% YoY increase.

Spotify said it also was seeing "increasing momentum" in Japan - the world's second largest music market where CDs still dominate.

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