Photo Credit: Maxim Hopman
Wall Street analysts expect Spotify to post a year-over-year decline, despite higher revenues this quarter.
Spotify’s earnings report is expected to be released on October 25, 2022. Zacks analysts believe the DSP will post a quarterly loss of $0.88 per share in the upcoming earnings report, a YoY change of -83.3%. Revenues are expected to be $3.06 billion, a rise of 3.8% compared to the same quarter a year ago.
Spotify CEO Daniel Ek says the “dire macro environment” won’t slow his company’s momentum on the Q2 earnings call. That report delivered total revenue of $2.9 billion, up 23% and delivering just ahead of the analyst’s consensus expectation. Spotify has 433 million monthly active users, up 5 million from its projection and more than 19% compared to a year ago.
For its Q3 2022 report, Spotify said it expects to add 6 million premium subscribers and 17 million new users. Spotify’s stock has lost more than half its value in 2022 as tech stocks across the sector have taken a beating. Investors want to see a company that has more than one trick up its sleeve–like Netflix.
Spotify’s use case is that it’s the home of more than just music streaming–it also offers podcasts and now audiobooks. Music streaming isn’t a differentiation when its main competitors (YouTube Music, Apple Music, Amazon Music) are owned by companies with ecosystems and services to which people already subscribe. Both Apple and Google offer music streaming as part of their bundled services. Even Amazon provides access to a pared-down library of music for Prime subscribers.
Spotify’s strength is building out its social features and exclusive content–community playlists, curated content, and podcast deals are all part of that strategy. “I think a lot of people are grouping us and Netflix together,” says Ek. “And I’ve said this before, but I’ll say it again – besides both being media companies and being primarily subscription revenue companies, that’s kind of where the similarities end for me.”