Spotify passes the 400 million user mark but its stock market continues to fall

In the last quarter of 2021, Spotify surpassed 400 million users. Among them, 180 million pay a premium subscription. However, the streaming service is experiencing weaker growth than in previous years, which makes investors particularly cautious. Not to mention the recent controversy related to Joe Rogan’s podcast.

It’s the period of financial statements for the last quarter of 2021, and that of Spotify is mixed. As expected, the platform remains at the top of streaming services and even has the luxury of exceeding 400 million users. By reaching 406 million users, it shows a growth of 18% compared to the previous year. In total, 180 million of them have subscribed to a Premium subscription, i.e. 16% more than at the end of 2020.

In terms of turnover, Spotify has touched €2.69 billion in the last quarter (+24% compared to 2020). Things are also looking good on the loss side, as the firm is posting a deficit of 39 million euros, which is much lower than that of last year, which amounted to 125 million euros. Over the full year, turnover reached 9.67 million euros, or 22.69% more than in 2020, while losses were equal to 34 million euros. In 2020, Spotify had lost 581 million euros.

Why Spotify’s stock is falling

So where is the problem ? The first thing to note is the analysts’ disappointment. The latter had calculated better results, and the new forecasts from Spotify do not help matters. Indeed, it expects to reach 428 million users including 183 million paying subscribers by the end of the current quarter. Even if this objective is achieved, growth would continue to decline compared to the previous quarter.

Related: Spotify Bends to Singer Adele, Removes Default Album Shuffle

Also, investors are more cautious than usual. Spotify’s stock fell 10.43%, until today worth 171.90 dollars. Its financial results therefore drive the point home after a difficult week, caused by the controversy surrounding Joe Rogan’s podcast and his antivax messages. Daniel EK, boss of the service, tried to appease the spirits by declaring trying to “finding a balance between creative expression and the safety of our users”.

Source: Spotify

Leave a Comment