Spotify (SPOT) announced on Wednesday a rare net profit in the first quarter, but disappointed with the increase in its subscriber portfolio after a booming 2020, which earned it a loss on the stock market.
In the first quarter, Spotify, based in Stockholm but listed in New York, went green with a small net profit of 23 million euros, against one million a year earlier, thanks to the paradoxical effect of the recent decrease in its share which reduces its compensation costs.
At the end of March, the number of users reached a total of 356 million, with a 21% increase in the number of paying subscribers over one year, to 158 million, in the upper range of the group’s forecasts and close to analysts’ expectations. .
However, CEO Daniel Ek admitted, during an interview with the American channel CNBC, that the progression was “a little weaker” than expected by the group.
For him, this is primarily due to the backlash of the acceleration recorded in 2020, with a net gain of 31 million paying subscribers (+ 24%).
Due to the lingering effect of the coronavirus crisis, “some of the markets where we typically experience strong growth are still recovering,” said Daniel Ek, with data showing a slowdown in Europe and Latin America.
The market has especially retained this half-hearted figure of the quarterly publication and sanctioned the title, which lost 8.88% to 266.90 dollars around 12:10 to Nasdaq.
In the second quarter, Spotify expects to gain between 4 and 8 million net paying subscribers and between 10 and 17 million active users, which would bring it closer to the symbolic threshold of 400 million, which could be crossed before the end of the year. year (between 402 and 422 million expected at the end of 2021).
The turnover has increased by 16% over one year, to 2.15 billion euros, indicates the audio platform in its quarterly report. 90% of it comes from paid subscribers, while only 10% comes from users of the service serving advertisements.
In February, the Swedish group announced its launch in more than 80 new countries with a billion inhabitants, including highly populated countries such as Nigeria, Pakistan and Bangladesh. These launches have brought its presence to the vast majority of countries around the world – nearly 170.
“We are pleased with the contributions from new markets, with South Korea being the main driver,” Spotify said on Wednesday.
The platform is also investing heavily in the podcast, with several acquisitions including the American Megaphone and several prestigious launches, including a series of shows bringing together former President Barack Obama and American rock giant Bruce Springsteen.
The boss wants to buy Arsenal
Since its IPO in 2018, this is only the fifth quarter in the green of Spotify. The company has never delivered a full-year net profit despite its success in the online music market, where it is far ahead of its main rivals Apple Music and Amazon Music.
Last year, the Swedish flagship of online music had tripled its net loss to 581 million euros, due in particular to the good performance of its action which made its compensation costs soar. The former Stockholm-based start-up indeed uses a compensation mechanism for its employees indexed to the stock market price.
After hitting an all-time high of nearly $ 365 in mid-February, Spotify stock has since lost almost $ 100.
Rare European flagship of the Internet, the group currently weighs just over $ 50 billion in stock market valuation.
The co-founder and CEO of Spotify, Swedish billionaire Daniel Ek, applied again on Wednesday to take over London football club Arsenal.
He said he was “very serious” about his intentions and assured to have gathered the necessary financing for this acquisition.
The 38-year-old entrepreneur explained that he was not scalded by the dismissal of the current owner of Arsenal, the group Kroenke Sports and Entertainment (KSE), and is preparing for a long journey to the takeover .