The music streaming market leader made a loss of 581 million euros in 2020 despite 155 million subscription customers.
Company sign of the music streaming provider Spotify.
The music streaming market leader Spotify has disappointed analysts and investors with a weak outlook and significant annual loss. It didn't help that the company performed better than expected in the final quarter of the fiscal year. The group exceeded the mark of 150 million subscription customers, as Spotify announced on Wednesday in Stockholm. At the start of trading, the shares listed on the Nasdaq fell by more than eight percent.
For the current year, the management expects sales of 9.01 to 9.41 billion euros. Analysts had significantly more on the list with 9.28 to 10.09 billion euros. The group expects an operating loss of EUR 200 to 300 million in the financial year. The board warned of “increased uncertainty compared to previous years because of the unknown length of the pandemic and its ongoing impact on growth in users, subscribers and revenue.”
Tripled loss
The group performed better in the final quarter. With an increase of almost a quarter to 155 million premium customers compared to the same quarter of the previous year, Spotify exceeded its own expectations and those of the analysts. At 125 million euros, the net loss was around 40 percent lower than in the same quarter of the previous year. In 2020 as a whole, however, the deficit of EUR 581 million was more than three times as high as in the previous year.
In the three months up to December Spotify profited according to its own information from stronger customer growth in India, the USA and Western Europe. The number of monthly active customers (MAUs) rose by 27 percent to 345 million. Most Spotify customers therefore still prefer to use the free version of the service with advertising and a limited range of functions. Meanwhile, the company expects new impetus from its new South Korea deal, which started earlier this week.
The number two in the market, Apple Music, last spoke of 60 million subscription customers in summer 2019. In contrast to Spotify, the iPhone group does without a free variant.
For the year as a whole, Spotify was able to increase its sales by a good 16 percent to EUR 7.88 billion. The main driver was the premium segment, which accounts for the lion's share of sales. However, unfavorable exchange rate effects would have burdened sales, especially in the final quarter, it said.
