Spotify’s shares nosedived by 8% after the announcement of its quarterly figures since it went public.
The company’s revenue figures matched market expectations almost perfectly; with the revenue being 1.14 billion euros, converting to $1.37 billion which was the same figure forecast by Thomson Reuters. The number of paid subscribers too matched perfectly, a 75 million against the 75.1 million, consensus forecast by FactSet. This estimate went slightly awry as it predicted 98 million for its ad-supported active users for the month, the actual figure of which was 99 million. The reported net loss by the company was 169 million euros lesser than the earlier year’s loss of 173 million.
Spotify gave guiding figures for the present quarter and the range of its revenue estimates was 1.1 billion euros-1.3 billion euros as against a Thomas Reuters consensus estimated midpoint figure of 1.29 billion euros. Subscribers predicted were 79-83 million against an estimated 82.1million by FactSet.
Executives at the company expected their growth to move on a fast track as market share would take priority above profitability. The company’s strength was its ‘freemium’ upgrade program and music customization services. The company had invested huge sums for strengthening its Asian and African markets, a new app which would be free and a new ad platform besides widening the base of its podcast market.
Spotify’s another plus point was its student and family plans which had led customers to hold on to the platform. In that context, there was an announcement of a new package which contained video service Hulu. Its agreeable working with smart speakers, several operating systems and free membership gave it a keen edge over competitors.
The company was confident that it could take on competitors like Apple, Amazon and Google and were not impacted much from them. The IPO offer last month of the company was successful in spite of being unconventional. CEO, Daniel Ek seemed quite upbeat about the company’s future.
Before turning out to be a full-time writer and editor, James Tidwell was a blogger who wrote his outlooks and viewpoints relating to Entertainment and Sports. Owing to his interest and absolute fineness of playing with world beautifully, he was appointed to dabble in Entertainment and Sports world.