Spotify added simply 2 million premium subscribers within the first quarter of 2022 and wrapped up March with a complete of 182 million paid customers and 252 million ad-supported listeners, the corporate introduced Wednesday morning in its newest earnings launch. Whereas that paid subscriber tally was 1,000,000 below steering, the corporate was fast to notice that its wind-down in Russia, following its invasion of Ukraine, resulted in an “involuntary churn” of roughly 1.5 million subscribers there.
The corporate additionally positioned a caveat on the 422 million whole month-to-month energetic customers (MAUs) it’s reporting for the quarter ended March 31. Spotify believes that outperformance was resulting from a service outage that led to a number of million customers creating new accounts to get again in — and that excluding that occasion, MAUs would have been 419 million.
“While you exclude the influence of our withdrawal from Russia, we got here in line or forward on each metric,” stated CEO Daniel Ek in an investor name on Wednesday morning, describing the outcomes as a “testomony of the consistency of our execution and clearly reveals how compelling our providing stays… even within the face of uncertainty provoked by world occasions.”
Buyers responded to the quarterly outcomes with a flurry of exercise. Spotify’s share worth dropped under $100 for the primary time in after hours buying and selling, following Tuesday’s shut at $110. Following Spotify’s earnings announcement, the inventory opened on Wednesday at an all-time low $97 earlier than rebounding to $105 — however then dropping to $98 as of 10:50 EDT. The corporate’s share worth has dipped roughly 35% within the final month.
First-quarter income was 2.66 billion euros ($2.96 billion), according to steering, representing 24% development year-over-year however a 1% dip from This autumn’s 2.69 billion euros. The overwhelming majority of Q1 income got here from subscriber revenue, which grew 23% y/y to 2.38 billion euros ($2.65 billion). Advert-supported income grew 31% y/y to 282 million euros ($314 million), however represented a major drop in comparison with final quarter when it was 394 million euros ($445 million).
The closely-watched common income per consumer (ARPU) metric for premium subscribers was up 6% y/y to 4.38 euros ($4.9), which the corporate chalks as much as a worth enhance in 2021 and a “favorable product combine shift.”
Spotify’s 1% drop in whole income in comparison with the fourth quarter is a carbon copy of final 12 months’s Q1 dip and according to first quarter traits.
Gross margin, the rest after royalties and different content material related, was 25.2% of whole income, according to earlier quarters. The corporate cited a “favorable income combine shift in direction of podcasts and rising market exercise, which was offset by elevated non-music content material spend, investments in music product enhancements” and different components.
Spotify reported an working lack of 6 million euros ($6.6 million), down from 7 million euros in This autumn and 14 million euros revenue in Q1 2021. Working bills totaled 677 million euros ($754 million) for the quarter, barely increased than anticipated resulting from increased prices in personnel. On that matter, Spotify elevated its full time worker rely from 7,690 to eight,230 since its final earnings interval.
Spotify stated that its enterprise has greater than 3.6 billion euros ($4 billion) in liquidity and that its free money movement was 22 million euros ($24.5 million), a 19 million lower y/y.
As for non-music content material, Spotify highlighted a 400,000 web acquire in podcasts throughout the platform, to 4 million, in comparison with the tip of 2021. The corporate famous that the podcast share of total consumption hours throughout Spotify reached “one other all-time excessive,” although the precise share was not disclosed.
Spotify’s Monetary Metrics (Q1 2022 vs. Q1 2021)
- Income: 2.66 billion euros ($2.96 billion), up 24% 12 months over 12 months from 2.14 billion euros
- Gross margin: 25.2%, down from 25.5%
- Working loss: 6 million euros, an enchancment from a 7 million euros loss
- Free money movement: 22 million euros, down from 41 million euros
Listener Metrics (Q1 2022 vs. This autumn 2021)
- Paid subscribers: 182 million, up 1% from 180 million in This autumn 2021
- Advert-supported listeners: 252 million, up 7% from 236 million in This autumn
- Complete month-to-month energetic customers (MAUs): 422 million, up 4% from 406 million in This autumn
- Common income per subscriber: 4.38 euros, principally flat from This autumn
Q2 2022 steering
- Income: 2.8 billion euros ($3.1 billion at present charge)
- Paid subscribers: 187 million
- MAUs: 428 million
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