Daily Management Review

First Ever Quarterly Profits Reported By Spotify, Reports 96 Million Subscribers


02/06/2019




First Ever Quarterly Profits Reported By Spotify, Reports 96 Million Subscribers
The streaming giant Spotify reported its first ever quarterly profit even as the market and analysts are more included to watch out for the numbers of user growth of the company since the listing of the IPO of the company.  
 
The company has always said that its focus is on long-term strategy of growth and not on short term profits. The company however startled investors and the market by reporting a fourth quarter 2018 operating income – the first in its history, of €94 million, after it had reported a number of consecutive quarters of losses for the matrix. The company managed to reduce its operating expenses to €305m.
 
The company also reported an increase in its net income for the quarter at €442m compared to €43m in the earlier quarter.
 
There was a 36 per cent year on year increase in the number of premium subscribers which touched 96 million. This number was at the upper end of the forecast range that was provided by the company. The annual Holiday campaign and its Google Home promotion were identified by the company to be the drivers of the good performance. It also has a long-term partnership with Samsung.
 
In comparison, a total number of around 56m premium subscribers was reported by Apple Music.
 
There was a 29 per cent year-on-year growth in the number of monthly active users which reached 207m which was more than the high end of its guidance spectrum that was issued by the company. While the company noted strong growth in Latin America and emerging regions, Spotify said that its performance was better than expected in most markets.
 
The company forecast a guidance of 215-220m monthly active users for the first quarter of 2019 which would be a 24-27 per cent increase year on year. It also forecast a guidance of 97-100m premium subscribers which would be 29-33 per cent increase year on year and total revenue forecast of €1.35 - €1.55bn which would be 19-36 per cent hike year on year.
 
For the entire year of 2019 the company forecast 18-28 per cent year on year increase in monthly active users at 245-265m and a 21-32 per cent year on year increase for premium subscribers at 117-127m premium subscribers and total revenue of €6.35-€6.8bn, m a 21-29 per cent year on year increase.
 
The launching of its services across the Middle East and North Africa in mid-November resulted in the company now having operations in 78 countries compared to 65 countries at the beginning of the quarter.
 
During the quarter, more than 15 billion hours of content on the platform were listened to by its users, the company said. Importantly, there was an increase in the number of hours across both the ad-supported and premium tiers.
 
On a monthly basis, Spotify’s artist platform was used by more than 300,000 creators and their teams, the company said.
 
(Source:www.musicweek.com)






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