Spotify Stock Falls On Q2 ARPU Drop, MAU Growth; Predicts Operating Loss For Q3 And Q4

Spotify Stock Falls On Q2 ARPU Drop, MAU Growth; Predicts Operating Loss For Q3 And Q4
  • Spotify Technology SA SPOT reported second-quarter FY21 revenue growth of 23% year-on-year to €2.33 billion, helped by advertising strength and subscriber performance. The Q2 revenue of $2.81 billion beat the analyst consensus of $2.72 billion.
  • FX headwinds of 430 basis points were higher by 230 basis points than expected, primarily driven by US dollar weakness against the Euro.
  • Total MAUs (Monthly Active Users) rose 22% Y/Y to 365 million. The MAU performance was slower than expected, primarily due to lighter user intake during the first half of the quarter.
  • Premium Subscribers increased 20% Y/Y to 165 million. Ad-Supported MAUs grew 24% to 210 million.
  • Premium Revenue grew 17% Y/Y to €2.06 billion. Within Premium, the average revenue per user (ARPU) was down 3% Y/Y at €4.29. Ad-Supported revenue rose 110% to €275 million.
  • The gross margin expanded by 308 bps to 28.4%. It posted a positive operating margin of 0.5%.
  • Premium gross margin expanded 261 bps to 30.8%. Ad-Supported gross margin expanded by 2,321 bps to 11.3%.
  • Loss per share of $(0.23) beat the analyst consensus for a loss of $(0.45).
  • Spotify held €3.1 billion in cash and equivalents at the end of Q2 and generated €54 million in operating cash flow.
  • Outlook: Spotify sees Q3 revenue of €2.31 billion-€2.51 billion, gross margin of 24.4%-26.4%, Total MAUs of 377 million-382 million, Total Premium Subscribers of 170 million-174 million, and an operating loss of €(80) million - €0 million.
  • It sees Q4 revenue of €2.48 billion-€2.68 billion, gross margin of 24.1%-26.1%, Total MAUs of 400 million-407 million, Total Premium Subscribers of 177 million-181 million, and an operating loss of €(152) million-€(72) million.
  • Price action: SPOT shares traded lower by 5.98% at $222.77 on the last check Wednesday.
  • Photo by Photo Mix from Pixabay

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