Streaming music service Spotify Technology (SPOT) saw its stock slide on Thursday, a day after releasing first-quarter results that disappointed investors.
Spotify, which operates the world’s biggest music streaming service, reported on Wednesday 26 percent rise in first-quarter revenue, narrowly missing Wall Street expectations.
It’s only been one month since Spotify went public, but it’s first quarterly earnings report revealed the Swedish streaming company’s status.
For the current quarter, Spotify expects to lose the equivalent of $121 million on sales of $1.45 billion.
By the end of 2018, the company is aiming to have 92-96 million paying subscribers, along with 198-208 million monthly active users.
According to recent figures, Apple Music has 40 million subscribers, nearly 50% less than Spotify, but is gaining subscribers at a rate of 5% a month.
The stock is now down 6.5% to $159.00 per share in after-hours trading shortly after its earnings report was released. The stock was down 9 percent at $153.77 in early trading, having risen 14 percent as of Wednesday’s close since its listing on April 3. They’ve dropped roughly 7% from that level.
The 75 million subscriber figure was slightly above the 74.43 million consensus estimate of analysts polled by Thomson Reuters.
According to Spotify, the company at the end of March had 170 million active users. Excluding forex effects, revenues were up 37 percent, Spotify said. The fund is “aimed at strengthening and stimulating growth in Ontario’s music companies and supporting this growing sector” through four key music grant programs: Music Company Development, Music Industry Development, Music Futures and Live Music. The operating result remained a loss of Euro 41 million, though down significantly on a loss of Euro 139 million in the year-earlier period.
Costs and margins: Gross margin was 24.9% in Q1, up from 24.5% in Q4 and 11.7% in Q1 2017.
Apple Music is adding users at a five percent growth rate per month versus Spotify’s two percent.
Quarterly revenue rose 26 percent to Euro 1.139 billion.