Spotify gains 16 million MAUs during the first quarter

By Emmanuel Legrand

Spotify seems to be weathering the coronavirus crisis as the music streaming service reported Q1 revenues of €1.848 billion ($2bn) and an operating loss of €17m. 

  Premium revenue grew 23% year-on-year to €1.7bn, and "slightly outperformed our expectations," wrote the company in a note to shareholders. Ad-Supported revenues grew 17% y-o-y, but "fell short of expectations as a result of impacts from Covid-19, particularly the last three weeks of the quarter."

  On the positive side, gained 16 million new monthly active users (MAU) during Q1, with an additional 6 million paid subscribers and 10 million freemium users. Overall, Spotify had 286 million MAUs, and passed the mark of 130 million premium (up 31% year-on-year), while ad-supported MAUs reached 163 million.


  The company said usage in car, wearable, and web platforms dropped (in double digits in some instances), but the audience through TV and game consoles "has grown materially, in excess of 50% over the same time period." Connected device usage generally is up "more than 40% among Ad-Supported users globally."

Routines have changed

  "It’s clear from our data that morning routines have changed significantly. Every day now looks like the weekend," wrote the company.

  “Despite the global uncertainty around Covid-19 in Q1, our business met or exceeded our forecast for all major metrics,” the company said in a note to shareholders. “For Q2 and the remainder of the year, our outlook for most of our key performance indicators has remained unchanged with the exception of revenue where a slowdown in advertising and significant changes in currency rates are having an impact.”

  Looking forward to the next quarter and the full year, the company made the following forecasts:

  For Q2 2020: 
● Total MAUs: 289-299 million
● Total Premium Subscribers: 133-138 million
● Total Revenue: €1.75-€1.95 billion
● Gross Margin: 23.3-25.3%
● Operating Profit/Loss: €(45)-€(95) million

  For full Year 2020:
● Total MAUs: 328-348 million
● Total Premium Subscribers: 143-153 million
● Total Revenue: Reduced to €7.65-€8.05 billion from €8.08-€8.48 billion
● Gross Margin: 23.2-25.2%
● Operating Profit/Loss: €(150)-€(250) million

  "Given the extraordinary operating circumstances we currently face with respect to the impact of COVID-19 there is a greater likelihood of variances within those ranges than typical quarters," said Spotify.