By Dhirendra Tripathi
Investing.com – Spotify (NYSE:) stock plunged more than 9% Wednesday as the company’s monthly active user base came below its own estimate for the second quarter and average revenue per user in its mostly-paid Premium service fell.
The company blamed Covid-19 for lighter user adoption in several markets. In some cases, it paused marketing campaigns due to the severity of the pandemic. Higher wages offset the reduction in marketing expenses, Spotify said.
Separately, a user sign-up issue associated with a global third-party platform created unexpected intake friction, a company note said. This issue has since been resolved.
Total MAUs grew 22% year-on-year to 365 million in the quarter, finishing below its guidance of 366 million to 373 million. It added 9 million MAUs in the second quarter.
Average revenue per user in the streaming service’s Premium offering fell 3% year-on-year. Premium revenue grew though, by 17% to 2.05 billion euro ($2.41 billion).
Ad-supported revenue more than doubled to 275 million euro from 131 million euro in the same quarter a year ago, led by the company’s Direct and Podcast sales channels.
Total revenue rose 23% to 2.33 billion, coming toward the top end of the company’s guidance.
Adjusted loss per share was 19 cents, just over half of the loss of 37 cents forecasted.
Spotify aims to close the ongoing quarter with MAUs in 377million to 382 million range and total premium subscribers between 170 million and 174 million.
Total revenue is seen between 2.31 billion euro and 2.51 billion euro.
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