Spotify beats the Street, hits paid user landmark
As of its most recent quarter, music streaming market leader Spotify has become the first platform of its type to reach 100 million paid subscribers. To get there, it beat the Street’s predictions over how many paid subscribers it would add in the three-month period, and that’s giving investors and analysts alike fresh hopes for the company’s room to grow even further!
Spotify’s share price is up 21% so far this year
Source: Yahoo Finance
Spotify managed to add 4 million customers during the quarter, easily outpacing analysts’ expectations of 3.3 million. It also beat on revenue, delivering $1.51 billion (a 32.7% rise, year on year) against consensus estimates of $1.47 billion. However, some shine was taken off these incredible achievements by the announcement that the company lost 79 cents per share – far more than the 41 cents per share loss that the Street had predicted. This mixture of very good news and an unpleasant shock left investors a little confused – Spotify’s share price jumped, then fell by as much as 2%.
A major focus for analysts during the quarter and on the back of Spotify’s results was competition – namely, how the company plans to fend it off. Company’s vying with Spotify include some of tech’s biggest: Amazon, Apple, and YouTube. So far though, they don’t seem to have managed to hold it back. Spotify’s CEO was confident in regards to this question, telling analysts: “the music industry market is way bigger than most people realised.”
Spotify says that it expects to add a further 7 million to 10 million subscribers over this quarter – an ambitious target, but one that it is pursuing strategically. Over the last few months, Spotify has focused on two areas that it thinks are ripe for massive growth: India, and podcasts. Having invested hundreds of millions of dollars in each, these two pathways to growth could sustain the company’s incredible ascent for years into the future.
Dominion holds Spotify in its Global Trends Luxury Fund.
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