Spotify misses on revenue in first earnings report since IPO

Sony sells half its Spotify stock, reportedly worth US$750 million

You have missed it if you blinked, but Spotify went public just a few weeks ago and, in turn, the streaming service on Wednesday released its earnings report for the March quarter.

Spotify disappointed investors last night with its first financial update since its unusual stock market debut last month.

The losses were down from 139 million euros (RM 655,240,335.75) in the same quarter a year earlier and figured within the company's expectations.

At the closing bell and before the slide in share price, Sweden-based Spotify sported a $30.3 billion market cap, which dwarfs that of USA -based Pandora, with a market cap of $1.4 billion.

Even amid fierce competition from the likes of Apple and Amazon, Spotify added 4 million paying customers during the quarter, and its paid subscriber numbers increased 45% from the year before.

Spotify said paid subscriptions for the second quarter would range between 79 million and 83 million, which at the midpoint was below Wall Street's consensus forecast of 81.79 million, according to Thomson Reuters I/B/E/S.

The new milestone came as part of the firm's quarterly earnings announcement, and the subscriber base was in line with expectations.

The gains announced Wednesday enabled Spotify to maintain a large lead over Apple's music-streaming service, which has about 40 million.

In the wake of the company's earnings report, Spotify shares plummeted almost 10% in after hours trading.

Gross margin topped the high end of guidance at 24.9%. If we split that evenly, Spotify is growing at roughly 2 million subscribers per month.

Revenues were up 26% to €1.139B; that's up 37% after adjusting for a negative foreign-exchange impact. In the second quarter previous year, its operating loss came in at €79 million.

Both positions require a good background of working in the music industry, which indicates that Spotify will not only launch as a service in the region, but will also look at promoting and focusing on regional talent.

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