(Reuters) – Spotify Technology SA (AD.N) reported a better-than-expected second-quarter revenue on Tuesday, but it added fewer subscribers than estimated, sending the shares down 2.2 percent in trading before the bell.
FILE PHOTO: The first logo will be displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, New York, USA, on 3 May 2018. REUTERS/Brendan McDermid/File Photo
The world’s most popular paid-for music streaming service, said in, premium subscribers will be increased to 30% from a year earlier to 108 million, but missed analysts ‘ expectations of 108.5 million euros.
The revenue generated from premium subscriptions, which accounted for nearly 90 percent of the group’s total revenue increased to 1.50 billion euros ($1.67 billion) in the second quarter of the year.
Since the launch of the service for more than a decade ago, Spotify has to overcome the resistance from the major record labels and major artists, but to change the way people listen to music, and has grown to become a global leader in music streaming services.
To fuel the next phase of its growth, it has launched its service in South Africa, and the Middle East, and India in the past few months, even if the price is aggressive, in the developed world.
However, it is still facing competition from Apple Inc’s (AAPL.D), who is trailing behind Spotify, with more than 60 million subscribers in the month of June.
Spotify’s monthly active users, including the ad-supported free version, and it grew by 29% to € 232 million and beat expectations of 227.7 million people.
Now it is expected to be between 240 million and 245 million monthly active users in the third quarter of the year. Analysts had expected at the end of the current quarter, with 242 million users.
Revenue rose to 1.67 billion euros for the three months ended June 30, from 1.27 billion euros a year earlier, beating analyst’s average estimates of 1.64 billion euros, according to IBES data, Refinitiv.
The net loss attributable to owners of the company narrowed to 76 million euros, or 0.42 euros a share, from 394 million euros, or 2.20 euros per share, a year earlier. Analysts on average had expected a loss of 0.32 euro per ordinary share.
Shares of the Stockholm, Sweden-based company were trading at $151.7.
Reporting Sayanti Chakraborty in Bengaluru; Editing by Arun Koyyur