Spotify reported better-than-expected growth in first-quarter earnings on Monday as the music streaming company hit 100 million paid subscribers for its superior service, sending its shares up almost 5 percent.
The world leader in the sector, with almost twice the number of subscribers of closest rival Apple Music, Spotify has launched in areas like India, Middle East, and North Africa in recent months, aiming to fuel the next phase of its development as it proceeds to price competitively in the developed world.
The business reported total Q1 earnings of $1.69 billion ($1.511 billion), more than analysts’ expectations of $1.64 billion. The net loss of 88 cents per share ($0.79) missed Wall Street projections of EPS of 39 cents ($0.35). According to Spotify, the uptick in its share price during Q1″significantly increased our operating expenses” for the period because the stock bump increased payroll taxes associated with employee salaries and benefits, including stock-based compensation.
Spotify’s latest earnings also further illuminates the company’s podcasting ambitions. The company says it intends to work on an improved advertising model for podcasts, which would involve better “targeting, measurement, and reporting capabilities.” This suggests the company plans to develop ways of letting podcast producers place different ads in a podcast depending on the user being targeted, similar to the ads played during ad-supported music listening. Spotify recently acquired the podcasting companies Gimlet Media, Anchor, and Parcast, and currently offers a quarter of a million podcasting titles on the streaming platform.
Spotify said that it expects income from podcasts to”quicken” through 2019, after generating a”little incremental benefit from podcasts throughout Q1 following our acquisitions of Gimlet Media and Anchor in February” and the rollout of Spotify original podcasts including ” The Joe Budden Podcast,” “Amy Schumer Presents: 3 Women, 1 Keith,” and”Dope Labs.”
“Over time, our vision is to create a stronger marketing solution for podcasts that will enable us to layer in the kind of targeting, measurement, and reporting capabilities we have for the heart ad-supported business,” Spotify said.