Spotify's revenue gets a boost as music streaming picks up

The company's revenue rose 22% to €1.84bn during the first-quarter

Spotify reported a 22 per cent rise in is first quarter revenue to 1.84 billion euros. Reuters

An uptick in music streaming helped boost Spotify's top line during the first quarter this year as the company gained more subscribers during the coronavirus pandemic.

The Swedish music streaming company, listed on the New York Stock Exchange, reported a 22 per cent rise in revenue to €1.84 billion (Dh7.34bn) as the number of premium subscribers surged 31 per cent to 130 million, the company said in a statement on Thursday. Total monthly active users have also increased 31 per cent to 286 million.

“Despite the global uncertainty around Covid-19 in the first quarter, our business met or exceeded our forecast for all major metrics,” the company said.  “For the second quarter 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.”

The company recorded a third consecutive year-on-year growth in monthly active users (MAUs) above 30 per cent. Growth in North America accelerated for the second straight quarter “led by outperformance in the US" while Europe - the company's largest market - also performed well. Latin America and the markets classified as "Rest of World" continued to see the fastest growth, with those segments growing 36 per cent and 65 per cent year-on-year respectively.

“We continue to be excited by the growth trajectory and adoption of podcast content globally,” the company said.

“While the current environment has shifted listening patterns temporarily, nothing we have seen changes our long-term view of the potential for podcasts. Today, 19 per cent of our total MAUs engage with podcast content, up from 16 per cent in the fourth quarter of 2019, and consumption continues to grow at triple digit rates year-on-year.”

For the second quarter, Spotify expects to see 289 to 299 million MAUs while total premium subscribers could number between 133 to 138 million. Total revenue is estimated to be in the range of €1.75bn to €1.95bn.