Proactive Investors - Spotify shares moved higher in pre-market trading after the Stockholm, Sweden-based streaming platform unveiled a higher-than-expected jump in user numbers with the release of its first quarter 2023 financial results.
Monthly active users grew 22% year-over-year from 422 million to 515 million, 15 million above Spotify’s guidance. This represented 5% growth quarter-over-quarter.
Net additions of 26 million represented the company’s largest ever 1Q growth and second largest quarterly net addition performance in the company’s history, Spotify noted.
Premium subscribers also grew 15% from 182 million in the year-ago quarter to 210 million, 3 million above Spotify’s guidance.
Revenue for the quarter was €3.04 billion, a 14% jump from €2.66 billion in the year-ago quarter, but below the company’s guidance of €3.1 billion and the consensus analyst forecast of €3.36 billion.
Spotify said its revenue growth was below its expectations due to macro-related variability in its advertising business.
Its earnings also fell short of expectations at a loss of €1.16 per share, below the consensus expectation of a loss per share of €1.04. In the year-ago quarter, the company posted earnings per share of €0.21.
However, the company posted a smaller-than-expected operating loss of €156 million which the company attributed to lower marketing spend. Spotify had forecast a €1.94 billion operating loss.
“We had our strongest 1Q since going public in 2018, with nearly all our KPIs surpassing expectations,” Spotify said on its results. “Overall, we are encouraged by the strong start to 2023.”
For the second quarter, Spotify forecast total monthly active users of 530 million, total premium subscribers of 217 million, revenue of €3.2 billion, and an operating loss of €129 million.
Spotify shares had added 7.1% at US$140.80 before the opening bell in New York on Tuesday.