Streaming music and podcast service Spotify Technology (SPOT) on Wednesday reported more subscribers than Wall Street expected for the first quarter. But it missed views on total monthly active users. Spotify stock tumbled in early trading.
The Stockholm-based company lost the equivalent of 30 cents a share on sales of $2.59 billion in the March quarter. Spotify reports financial results in euros. Analysts expected Spotify to lose 49 cents a share on sales of $2.59 billion. In the year-earlier period, Spotify lost the equivalent of 22 cents a share on sales of $2.04 billion.
Spotify added 3 million paying subscribers in the first quarter, ending the period with 158 million premium subscribers worldwide. Analysts had forecast Spotify adding 2 million new subscribers. Three months ago, Spotify predicted it would add 1.5 million new subscribers, based on the midpoint of its outlook.
The company also reported 356 million total monthly active users, up 24% year over year. In addition to a paid tier, Spotify offers an advertising-supported service. Analysts were looking for 360 million monthly active users in the quarter.
Spotify Stock Drops After Q1 Report
In a letter to shareholders, Spotify said its monthly active users were “modestly below” its internal expectations but within its guidance range.
In premarket trading on the stock market today, SPOT stock fell 8.5%, near 268.
Spotify stock hit an all-time high of 387.44 on Feb. 22 before the tech stock sell-off.
Based on the midpoint of its guidance, Spotify expects to generate the equivalent of $2.73 billion in sales in the June quarter. Wall Street was modeling $2.74 billion.
For the second quarter, Spotify is targeting 6 million new subscribers for a total of 164 million. It sees monthly active users increasing to 369.5 million.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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