Streaming company Spotify Technology SA released its first quarterly report this week since the company began operating in 2008. Spotify’s user base increased to about 170 million while it registered €1.14bn in revenue. However, the streaming services stock prices took a plunge after it released the report.
As of 2 May, when the report was released, Spotify had 75 million paying subscribers while 99 million users were on the free tier of Spotify. The company performed within the estimate of its future earnings but its shares prices dropped to $153 from $165, the highest Spotify traded on the New York Stock Exchange (NYSE), where it is listed as SPOT since it went public last month. The company also registered a net loss of €169m.
Some of Spotify’s highlights for the first quarter include a direct listing of its shares on NYSE, expanding the free tier with optimized listening for users that allows them to curate and personalize their own playlists.
The streaming service also embarked on an expansion project in March that saw it launch in South Africa. It also began offering its services in Israel, Romania, and Vietnam. The expansion in new markets accounted for the increased number of subscribers. However, Spotify still has not been able to convert a number of its free-tier users to paid subscribers. The report shows that the streaming service has about 4 million paying subscribers who do not use the service.
The Spotify report provides future projections in which Spotify says it hopes to increase monthly active users between 175 to 180 million with a total of 79 to 83 million paying subscribers.
The Swedish company has estimated revenue for the second quarter at about €1.1bn to €1.3bn and expects and an operational loss of about €60m to €140m.
By the end of the fourth quarter, Spotify expects to boast 198 to 208 million active users with a total of about 92 to 96 million paying subscribers and a total revenue of €4.9 to €5.3bn.
“We believe we’re only in the second inning of the Spotify journey. I look forward to sharing our future growth in upcoming quarters,” Spotify CEO Daniel said in a statement.