(Bloomberg) — Spotify Technology SA, the leader in music streaming, added 25 million customers in the final quarter of 2020, exceeding analysts’ forecasts and bolstering its case to advertisers.
That brings total monthly active users to 345 million, the Swedish company said Wednesday. Analysts were forecasting the tally would rise to 343 million, according to the average of estimates compiled by Bloomberg. Revenue grew to 2.17 billion euros ($2.6 billion), compared with estimates of 2.15 billion euros.The company forecast revenue for 2021 of 9.01 billion euros to 9.41 billion euros, missing the average analyst estimate of 9.28 billion euros to 10.09 billion euros.
While Spotify suffered from a brief drop in use in the early months of the pandemic, the company has rebounded in recent months and is now seeing record listening. Its recent expansion to Russia and 12 other countries accelerated user growth, especially outside North America and Europe.Total premium subscribers reached 155 million, up 24% year on year.Spotify’s advertising business has also rebounded after a dip during the early months of the pandemic. Ad sales reached 281 million euros, led by the podcast business, which grew 100% over the past year. Sales had slipped by 21% in the second quarter of 2020, and grew in just single digits in the third quarter.Spotify surpassed 150 million paying subscribers for the first time, but more important to investors is what those customers are paying. Average monthly revenue per user fell to 4.26 euros. Record labels have long complained that Spotify is practically giving away the service in many places. But the company just raised prices in Canada, and introduced its service in Korea without a free tier.”We continue to see strong growth in podcast consumption, with consumption hours in Q4 nearly doubling since Q4 2019,” Spotify said in the statement. “As of Q4, we had 2.2 million podcasts on the platform (up from more than 1.9 million podcasts in Q3).”
Spotify fell about 5% in pre-market trading. The shares have climbed 9.7% in 2021 after more than doubling last year.
See analysts’ estimates.Read Spotify’s statement.
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