Will it have an impact? Ek said it’s too early to know. The company provided Q2 guidance for total revenue of €2.80 billion and an operating loss of €197 million, which includes a €50 million hit from unfavorable currency exchange rates.WGA East-Represented Gimlet & Parcast Employees Blast Parent Company Spotify In Wake Of Layoffs Spotify posted net income of €131 million, translating into earnings per share of €0.21 per diluted share. Spotify reported revenue of €2.66 billion, up 24%, which was in line with expectations. Meanwhile, Ek claimed, Netflix faces much more intense competition in video streaming than Spotify does in audio. Spotify is largely in the content-licensing business, he said, while Netflix’s spending skews significantly more toward original and exclusive shows and movies.
“I’ve said this before, but I’ll say it again: besides both being media companies and being primarily subscription-revenue companies, that’s kind of where the similarities end for me.”
“I think a lot of people are grouping us and Netflix together,” Ek told investors. On the company’s earning call, Spotify CEO Daniel Ek tried to discourage comparisons between his company and Netflix, which in Q1 posted its first decline in subscribers in more than a decade and signaled that the company may be bumping up against a growth ceiling. Spotify forecast 187 million paid subscribers for Q2, which was below Wall Street expectations of 188.9 million for the period, per FactSet. The decline included a loss of about 1.5 million Premium subs stemming from the company’s ceasing operations in Russia - and Spotify claimed that, excluding Russia, paid user growth was above expectations.Ĭlick here to sign up for Variety’s free Strictly Business newsletter covering earnings, financial and investment news, and more. That was lower that the expected 3 million net adds on the paid-user front, while Spotify topped forecasts for overall monthly users (both free and paid). Investors appeared to react to Spotify adding just 2 million Premium subscribers, to reach 182 million, in the first quarter of 2022. That’s down from a high of about $69 billion in February 2021, when the company was riding high on COVID-related tailwinds. The stock ended the day at $96.67 per share, giving Spotify a market capitalization of less than $19 billion.
The chief concern pushing the stock down seemed to be that Spotify may be on the same trajectory as Netflix in hitting a wall in subscriber growth. Spotify shares closed down 12.4% Wednesday - hitting their lowest point in the company’s history as a public company - after the audio streamer’s paid-subscriber numbers disappointed investors.
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