No Netflix problems here: Spotify added 2m net subscribers in Q1 – despite cutting off 1.5 million subs in Russia

Next Netflix‘S shaky 2022 Q1 resultsAll eyes are on Spotify today (April 27) for the equivalent financial announcement…and perhaps Biggest test yet? before investors as a public company.

Good, Daniel EkThe company’s holdings beat expectations on various metrics in the three months to the end of March – most notably in terms of both subscribers and Monthly Active Users (MAUs).

Important News: Global Spotify Subscribers Grow 2 million quarterly in Q1 2022, up 182 million won subscribers globally. This is up from the 180 million subscribers the company counted at the end of 2021.

This net growth was achieved despite SPOT’s previous announcement of a loss 1.5 million won subscribers in Russia during Q1, where Spotify no longer paid users after Vladimir Putin’s invasion of Ukraine.

Spotify recorded some global subscriber growth in its first quarter thanks to “better performance in Latin America and Europe”.

(Spotify previously forecast it to hit 183 million won subscribers in Q1, but that’s prior to We already know about that 1.5 million submarines being cut in Russia.)

SPOT is also very confident about what will happen in the next financial quarter (Q2 2022).

It wrote in today’s investor guide that it expects its premium subscriptions to grow. 187 million won at the end of June this year, increased by 5 million subscription quarterly.

That prediction even further assumes Loss 600,000 VND Spotify said.

Excluding this impact in Russia, SPOT said, would mean the addition of approx 6,000,000 won new registrations globally in Q2 2022.

Back to Q1 2022: Spotify Monthly Active Users (MAUs) 422 million won at the end of the quarter, increase 16 million won Quarterly.

That 16 million won the jump includes the addition 3 million won MAU is what Spotify calls a “one-time benefit”.

The company explains: “During March, there was a brief service outage that resulted in users inadvertently logging out of Spotify. As a result, we believe certain affected users created new accounts to re-login, resulting in approximately 3 million won Additional MAU during the quarter. ”

However, even without this 3 million won increase, remaining 13 million won leap into Q4 2021 is 1 million prior to Spotify’s previously issued guidelines.

Spotify said of its MAU growth: “The business benefited from good business in Latin America and the Rest of the World, led by Indonesia, Brazil and Mexico.

“MAU growth was particularly strong in Generation Z Driven by successful product feature launches, such as our Lyrics experience, as well as marketing and content initiatives. ”

Of particular interest to record labels and music publishers: Spotify reports that ARPU (Average revenue per premium user) has increased 6% year-on-year in Q1, and equal to 3% YoY on a constant currency basis.

Spotify monthly ARPU numbers €4.38 (USD $4.91) in the first quarter of 2022 – still less than 5 US dollars per month, but a year-over-year improvement that Spotify has partly identified is due to “our price hike in 2021 and a favorable product mix change.”

Look at Spotify’s finance operating in Q1 2022, the company announced revenue of 2.661 billion euros ($2.98 billion)up 19% year-on-year on a constant currency basis.

Again, this precedes Spotify’s previously issued guidance.

Premium revenue increased by 18% YoY (in constant currency) to €2.379 billion ($2.67 billion)while ad-supported revenue grew 22% YoY (in constant currency) to 282 million euros ($316 million).

Spotify’s quarterly gross profit margin finished at 25.2% in Q1, slightly ahead of the guideline. The company said this “reflects a favorable revenue structure shift for podcasts” (i.e. away from music) as well as “growing market activity”.

These pluses to Spotify’s bottom line, it said, “are offset by increased spending on non-music content [and] invest in music product innovation”.

Spotify’s total operating costs 677 million euros ($759 million) in Q1, up 27% YoY.

Excluding the impact of Social Fee movements, Operating Costs were slightly higher than forecast due to higher staffing costs, partially offset by lower advertising costs. .”

Spotify’s quarterly operating loss for Q1 2022 at €6 million. In the last quarter (Q1 2021), SPOT posted an operating profit of 14 million euros.

Spotify is now forecasting that, in addition to the 187 million won subscribers, it will end in Q2 2022 with 428 million won MAU – increased by 6,000,000 won into Q1.

(Spotify explains that, if it wants to lessen the impact of the payments closures in Russia, as well as the March service shutdown – resulting in a one-time addition of 3m MAU in Q1 – more forecast 14 million won New MAU, quarterly, for Q2 2022.)

In addition, Spotify is forecasting the total revenue of €2.80 billion in the second quarter of 2022, and the quarterly operating loss was 197 million euroswhich it says includes an approximation”50 million euros impact on Operating Costs due to adverse movements in exchange rates”.

Announcing Q1 results to investors today, Spotify underscores the importance of a new deal with Google whereby first-time Android users can pay for their SPOT subscription directly through the app or choose to pay through Google’s Play Billing system.

All EUR-USD conversions in this report for Q1 2022 have been taken as the average prevailing rates determined by the European Central Bank.Worldwide music business