However, Spotify (SPOT) saw its stock drop more than 20 after hours on Wednesday. “As Spotify moved from a music platform to an audio platform (podcasting, live audio, audiobooks), it has unlocked the potential for a robust advertising business that is now too large for investors to ignore. As for Spotify (SPOT) ’s business, the company reported that it ended 2021 with 180 million paid subscribers. “Investors largely ignored Spotify’s advertising business during Spotify’s first few years as a public company, with subscriber growth dominating the narrative,” LightShed Partners analyst Richard Greenfield said in a note. Revenue from users who hear advertisements rose 40% to €394m or 15% of total revenue. Quarterly revenue rose to €2.69bn ($3.04bn) for the quarter from €2.17bn a year earlier, and above the €2.65bn expected by analysts, according to IBES data from Refinitiv. Premium subscribers, which account for most of the company’s revenue, rose to 180 million, beating analysts’ expectations of 179.9 million. Spotify said podcasts’ share of overall consumption hours on its platform reached an all-time high and it expanded its paid podcast subscriptions in 33 more markets and enabled podcasts for users in Russia, Egypt and Saudi Arabia. He said he was proud of the steps Spotify took following the concerns raised by the medical and scientific communities and he said policies were developed with input from internal and external exports. As a result of Young's actions, Spotify stock dropped 6 over the course of three. It’s truly a global operation.“Įk acknowledged the Rogan controversy at the outset of the earnings conference call, saying it presented learning opportunities. Here is our next video about Spotify stock analysis. “So that tells you something about the scale of this operation. “We have taken action on more than 20,000 podcasts since the start of the pandemic,” Ek told Reuters. Its chief executive officer, Daniel Ek, said the company already had a “sizable” content moderation team in place.
Rogan, a popular internet commentator, has since apologized and Spotify said it would start adding content advisories to episodes discussing Covid. The subscription music streaming service has invested over $1bn in the podcasting business, led by marquee exclusive shows such as The Joe Rogan Experience.īut the allure of the podcast star also drew condemnation after his show aired controversial views around Covid-19, drawing protests from artists Neil Young and Joni Mitchell. Revenue is expected to meet estimates of €2.60bn.
The company, however, forecast current-quarter paid subscribers of 183m, below expectations of 184m. Total monthly active users rose 18% to a record 406m. The outlook overshadowed fourth-quarter revenue, which came in higher than analysts’ estimates, as the music streaming company sold more advertisements and newer services such as podcasts, while recording a healthy 16% increase in paid subscribers for its premium service. Shares pared losses and were down between 3% to 9% after the initial shock. we don’t expect a material difference in the net additions for either users or subscribers in 2022 relative to 2021,” Vogel told Reuters.
#SPOTIFY STOCK DROP FULL#
“While we have not given full year guidance anymore on subscribers.
In an interview with Reuters after the report, Spotify’s chief financial officer, Paul Vogel, said this year would not be that much different than last in terms of users and subscribers. While aggressive growth is good, having high expectations based on recent trends can set the bar high for the stock.The company’s shares fell as much as 18% in late trading after Spotify reported the subscriber outlook. Spotify, for example, has grown its revenues by an average of 40% per year in the past half decade or so – see chart below. In the case of leading companies within high-growth sectors, which is the case of Spotify, analysts tend to make bold projections and valuation assumptions. Still, he thinks that it would be a mistake to count on the stock price staying above $200 for long. Advertising has potential upside vis-a-vis Pandora's ARPU, but we don't think it's enough."įor the analyst, there are risks to the bearish thesis on SPOT, now that the stock price has dropped substantially since the beginning of the year.
#SPOTIFY STOCK DROP PLUS#
"We've analyzed MAU growth from smartphone penetration and think that consensus remains too optimistic, plus growth should come from less profitable markets. Spotifys stock price dropped 8 when markets opened on Wednesday, hours after the streaming heavyweight reported it added 11 million paying customers. Cahall’s bearish views is the company’s MAU (monthly active users).
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