STOCKHOLM -Spotify forecast on Wednesday that revenue and paid subscribers would be below Wall Street estimates this quarter due to uncertainty over how long the coronavirus crisis would last and with it a surge in demand for its music streaming.
Spotify has seen a sharp rise in paid subscribers during the coronavirus crisis as people have been locked down at home and in the fourth quarter beat revenue estimates as it hit 155 million paid subscribers for its premium service.
While advertising was hit by the pandemic, it had little impact on subscriber growth, and may actually have contributed to pulling forward new signups, Spotify said in a statement, adding that total monthly active users rose 27per cent to 345 million.
Premium subscribers, who account for most of Spotify's revenue, were up 24per cent from a year earlier. Analysts on average were expecting the music streaming company to have 153.26 million paid subscribers, IBES data from Refinitiv showed.
However, Spotify said it expects total revenue in the range of 1.99 billion euros to 2.19 billion euros for the first quarter, short of expectations of 2.23 billion euros.
The company expects total premium subscribers in the range of 155 million to 158 million for the first quarter, whereas analysts were expecting it to hit 163.5 million.
Fourth-quarter revenue rose 17per cent to 2.17 billion euros (US$2.6 billion) for the three-months ended Dec. 31, beating estimates of 2.15 billion euros.
(US$1 = 0.8325 euros)
(Reporting by Supantha Mukherjee in Stockholm; Editing by Simon Johnson and Alexander Smith)