By Dhirendra Tripathi
Investing.com – Spotify stock (NYSE:SPOT) plunged 9% in premarket trading Thursday after the company’s projection of a slowdown in subscriber additions in the first quarter disappointed.
The weak quarterly outlook and a decision to drop its annual guidance come at a time when the company is reeling from a controversy around comedian Joe Rogan, the host of its most popular podcast. The stock is down by almost a fifth of its value since artists started to withdraw their work from Spotify's streaming platform in protest at his airing of what critics called unfounded scare stories about Covid-19 vaccines.
The episode forced the company to start tagging Covid-related content with an advisory. It also made public its content policy, without making changes to it.
Spotify expects to add only 3 million subscribers in the current quarter, down from 8 million in the three months through December. That will take it to 183 million subscribers by the end of March.
Total monthly active users are seen rising to 418 million by end-March, up 3% on the quarter. They had risen 7% in the fourth quarter.
"While we have not given full-year guidance any more on subscribers ... we don't expect a material difference in the net additions for either users or subscribers in 2022 relative to 2021," Reuters quoted Chief Financial Officer Paul Vogel as saying.
On a year-on-year basis, premium subscribers grew 16% and MAUs 18%.
Fourth-quarter revenue rose 24% to 2.7 billion euro ($3 billion). Ad-supported revenue rose 40% to 394 million euro. The net loss narrowed by more than two-thirds on lower finance costs.