Spotify Q1 2018 Earnings Steady Course But Is It Enough?
The 20,000 Foot View: On the May 2018 Spotify released its first quarterly earnings. The results fundamentally represent a continuation of the figures presented in Spotify’s filing and show strong results across most performance metrics. Nonetheless, investors were not satisfied (apparently spooked by growing losses), resulting in a dip in Spotify’s stock price. Such are the challenges Spotify is going to face as a public company, with investors that are not willing to make allowances for the nuances of the recorded music business. In this report, we leave the stock valuation to the financial analysts and instead dive into Spotify’s performance metrics and what they signify.
- Spotify hit subscribers, up from million in which is in line with million forecast
- Total MAUs million, while ad supported users by on 2017 (a slightly rate than subscribers) to reach
- Europe continues be Spotify’s number one region million subscribers representing of the
- Europe added most subscribers year on year million), followed by North America Latin America (both six million) Rest of World added three
- Ad supported between 2017 and 2017 was to or higher than subscriber in all regions except Europe
- Total gross was in 2018, more than the registered one year earlier
- Ad-supported gross increased dramatically from to reflecting this is where Spotify got biggest rights holder rate cuts
- Premium ARPU down to the lowest level 2016 to 2018
- Spotify generated average of gross profit per with music rights holders earning average of
- When compared Netflix’s 2015 results, Spotify has identical subscriber but lower ARPU higher costs of sales
Companies and brands mentioned in this report: AOL, EMI, Spotify, Seagram, Thorn Electrical Industries, Universal Music, Vivendi, Warner Music