- Spotify posted a bigger-than-expected loss, and sales and advisory were also short.
- The company said the results were driven by efforts to streamline operations and reduce costs.
- Spotify added a record number of new users and raised the prices of its premium plans.
Spotify technology (POINT) added a record quarterly number of new users to its streaming music platform, but its loss, sales and guidance were worse than expected, sending shares down more than 14% in trading on Tuesday.
Spotify reported a loss of 302 million euros ($333), or 1.55 euros per share ($1.71), in the second quarter of fiscal 2023, more than double the same period in 2022. Revenue rose 11% to 3.18 billion euros ($3.51 million). Both missed analysts’ forecasts. Gross margin fell to 24.1% from 24.6%.
The company said gross margin and operating losses were “primarily impacted by charges related to our measures to streamline operations and reduce costs.”
Number of new monthly active users (MAU) jumped 36 million to 551 million, a 27% year-over-year increase, boosted by gains among Gen Z listeners.
Spotify said it expected revenue of 3.3 billion euros ($3.64 billion) in the current quarter, missing estimates.
The company too has increased the prices of its premium subscription plans, with Premium Individual will cost $10.99 from $9.99 per month. In announcing the move, Spotify explained that “the market situation has continued to evolve since we launched.”
Spotify shares lost ground on Tuesday, but have added more than three-quarters of their value since the start of the year.