Spotify Slips as Monthly Users Rise 29% but Revenue Misses Forecasts

Spotify's quarterly loss came in wider than expected and revenue missed estimates.
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Spotify Technology  (SPOT) - Get Report was falling Wednesday after the music streaming company said monthly active users rose 29% from a year earlier but its quarterly loss was wider than expected and revenue missed estimates.

MAUs in the second quarter rose to 299 million, up 29% from a year earlier and slightly ahead of analysts’ estimates, the company said.

Paid subscribers in the second quarter were 138 million, ahead of Wall Street estimates. Premium subscribers, Spotify said, rose 27% from a year earlier.

Revenue in the quarter rose 13% to €1.89 billion ($2.22 billion). Analysts had been looking for sales of €1.92 billion.

Spotify reported a loss of €1.91 a share vs. a year-earlier loss of €0.42. Wall Street expected a loss of €0.35.

"Our business performed well in Q2 and continues to operate at a high level despite the continuing uncertainty surrounding the Covid-19 pandemic," Spotify said in a press release Wednesday.

"Excluding the impact of social charges related to the increase in our share price during Q2, all of our key metrics would have finished at or ahead of our expectations. Our liquidity position and free cash flow remain strong, and we are encouraged with the underlying trends of the business."

Spotify said growth in North America exceeded the company's expectations, and it "saw retention continue to improve" in the second quarter. It did, however, experience Covid-related softness in several countries across its emerging regions but "things rebounded significantly in June as we saw increased reactivations and a step down in churn."

Spotify said Wednesday it expects monthly average users in the third quarter of 312 million to 317 million vs. expectations of 315.2 million.

The stock fell 1.6% to $262.61 in trading Wednesday.