Spotify's stock drops after revenue rises less than expected, but MAUs beat
Shares of Spotify Technology S.A. slumped 7.4% in premarket trade Wednesday, after the Luxembourg-based streaming music company swung to a surprise fourth-quarter profit, but reported revenue that rose less than expected. Net income was 442 million euro ($503.4 million), or EUR0.36 a share, after a loss of EUR596 million, or EUR3.87 a share, in the same period a year ago. The FactSet consensus was for a loss of EUR0.16 a share. Revenue increased 30% to EUR1.495 billion, below the FactSet consensus of EUR1.501 billion. Monthly active users (MAUs) grew 29% to 207 million, above the FactSet consensus of 203 million, and premium subscribers increased 36% to 96 million, topping expectations of 95 million. The company said its outperformance was largely attributable to better-than-expected intake from its Google Home promotion and its holiday campaign. For the first quarter, the company expects revenue of EUR1.35 billion to EUR1.55 billion, surrounding the FactSet consensus of EUR1.47 billion, and MAUs of 215 million to 220 million, compared with expectations of 214.9 million. The stock has declined 2.3% over the past three months, while the S&P 500 has eased 0.6%. Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.