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Spotify share gains after the second earnings report since going public



Spotify shares rose on Thursday after the company announced its second quarter financial streaming financial results that were more or less in line with expectations.

  • Revenues: $ 1.49 billion versus $ 1.49 billion from Thomson Reuters
  • Premium subscribers: 83 million vs. 82 million expected through a FactSet consensus estimate
  • Ad-supported monthly active users: 1
    01 million vs. 99.7 million expected through a FactSet consensus estimate

In the second quarter, revenue growth was impacted by the European General Data Protection Regulation, which executives attributed to a lag in overall revenue growth. Spotify said in a statement that "GDPR disruption in our European markets in Q2, but [we] now seems to be far behind."

"The DSGVO was a timing challenge for us, mainly with Ad Holdings Free Business, an opportunity for them to try to bargain for a wider range of information sharing rights and we were not ready to give them "said CFO Barry McCarthy on a call to the media.

"When it became clear that we would not soften our position, we could go ahead and start booking revenue again, so it was kind of a short-term hiccup."

Spotify also noted a slight slowdown into ad-supported monthly active user growth Instead of growing at an average of 8 to 9 percent quarter over quarter, Spotify saw an increase in ad-supported monthly active users by approximately 2 percent quarter on quarter and 23 percent year-on-year. McCarthy said that slowing growth would only be a problem if it detracted from performance in future quarters.

Spotify's third-quarter outlook met Wall Street expectations. Spotify expects 85 to 88 million premium subscribers in the quarter ending in September, compared to 86 million expected by the analysts surveyed by FactSet. In terms of revenue, Spotify expects $ 1.4- $ 1.64 billion, compared to $ 1.55 billion expected from a FactSet consensus estimate.

Spotify shares have risen from $ 165.90 to $ 187.99 since public stock sale on April 3

In its first earnings report released in May, the music streaming company reported 75 million paying members, but reduced subscriptions reduced average revenue per user. This number, along with an unexpectedly weak sales forecast, drove shares down.

Spotify has recovered and the stock has hit a record high this week. Investors are showing more confidence in Spotify's business, but the company remains in fierce competition with Pandora and technology giants Google, Amazon and Apple.


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