Spotify‘s total number of users climbed 24% to 356 million in the first three months of the year, the music streaming service said Wednesday. Excluding people who listen free with advertising, Spotify’s paid members rose 21% to 158 million, the company said in its first-quarter results.
That’s right where Spotify expected to be in its guidance provided three months ago, but Wall Street analysts had been expecting Spotify to beat the company’s own targets. The latest results and Spotify’s new estimates for the second quarter were sleepier than expected. Analysts’ predicted, for example, that Spotify would add 9 million new subscribers this period on average, not 3 million.
Spotify shares tumbled 9.5% at $265 in premarket trading.
By the close of the second quarter, Spotify predicts it will reach 162 million to 166 million premium paid members. Analysts had expected that number to be closer to 174 million, according to Thomson Reuters. Spotify on Wednesday predicted 366 million to 373 million monthly active users in the second quarter.
Still, the latest figures reiterate Spotify‘s domination of subscription music around the world. The company appeared to remain above its No. 2 competitor, Apple Music. Apple doesn’t routinely disclose its paid membership and hasn’t offered an update in more than a year, obscuring just how much of a lead Spotify may have. Though Apple Music has surely grown significantly in the last 18 months, Applelast revealed its subscriber base at60 million membersway back in June 2019. UnlikeApple,Spotifyhas a free tier that lets anyone listen to music with advertising. Apple has never disclosed a monthly-active-user stat; almost all people who use Apple Music are subscribers.
Appledidn’t immediately respond to a request for comment on Apple Music’s growth.
As culture at large has shifted to streaming as themost common way people listen to tunes, Spotify and emerged as the leaders in a race to dominate subscription music. Though Spotify remains the biggest streaming service by both listeners and subscribers, Apple Music has benefited from the popularity of theiPhoneto recruit new members.
For the first quarter, Sweden-based Spotify reported a slim profit of 23 million euros ($27.7 million at current conversion rates), up from 1 million euros a year earlier; on a per-share basis, the latest period was a loss of 25 cents a share, widening from 20 cent loss a year earlier. Revenue rose 16% to 2.15 billion euros in the quarter.
Analysts on average expected a loss of 44 cents in the latest period, on revenue of 2.15 billion euros, according to Thomson Reuters.