Spotify’s Paid Subscribers Hit 138 Million as Music Streaming Demand Rebound

By Supantha Mukherjee and Kenneth Lee

Stockholm / New York (Reuters) – Spotify Technology SA On Wednesday, demand for music streaming rebounded from weakness related to coronovirus at the beginning of the quarter and its paid subscribers reached 138 million, ahead of Wall Street estimates.

However, the company’s quarterly revenue missed analyst estimates, with most ad-supported revenues falling 21%, as the spread of the epidemic kept advertisers at bay.

Shares of the Swedish company, which have risen nearly 80% since the beginning of this year, fell 3% to $ 253 before the market opened.

Spotify, which leads the market for music streaming ahead of rivals such as Apple Inc. And Inc. , Earns from paid subscriptions and by showing ads to non-paying users.

Premium subscribers, which accounted for most of the company’s revenue, were up 27% from a year earlier. According to Refinitive’s IBES data, analysts expected the company to have 136.4 million subscribers.

The world’s largest music streaming service also assured investors that its finances would no longer have a profound lasting impact on people not coming to work and that it would affect its full-year goals.

The company said in a statement that the strength in North America and other regions exceeded the beginning of the slow quarter and continued to improve in half of the previous quarter.

It expects total premium customers of 140 million to 144 million for the third quarter, up from 141.4 million expected.

Spotify also estimates total revenue of 1.85 billion euros to 2.05 billion for the third quarter. Analysts were expecting 2.01 billion euros.

Revenue for the three months ended 30 June rose 13% to 1.89 billion euros ($ 2.22 billion), but missed the analyst estimate of 1.93 billion.

Net loss for Spotify was 356 million euros, or 1.91 per share, compared with 76 million or 42 euros cents a year ago. Analysts expected a loss of 45 euro cents.

The widespread loss was mostly due to social charges – payroll taxes associated with employee benefits in Sweden, which increase with the increase in the company’s share price.

(Reporting by Supantha Mukherjee in Stockholm and editing by Ken Lee, Johan Ahlander and Louise Haydens in New York)

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