Business Corpus: Spotify Disappoints With In-Line First-Quarter Subscriber NumbersStreaming music leader Spotify Technology late Wednesday delivered its first quarterly report as a public company, but its in-line subscriber gains disappointed investors. The post Spotify Disappoints With In-Line First-Quarter Subscriber Numbers appeared first on Investor's Business Daily.

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Streaming music leader Spotify Technology (SPOT) late Wednesday delivered its first quarterly report since its initial public offering, but its in-line subscriber gains disappointed investors.

Spotify added 4 million new paying subscribers to its premium on-demand music service in the March quarter. That brought its total to 75 million worldwide, in line with analyst expectations.

Apple's (AAPL) rival service, Apple Music, has more than 40 million paying subscribers, the company said on its March-quarter earnings call Tuesday.

Spotify shares fell more than 7% near 157.75 during after-hours trading on the stock market today. During the regular trading day, Spotify hit an all-time high of 171.23, clearing a buy point of 169.10 from an IPO base, and ended the session up 3.1% to 169.99.

The Stockholm-based company went public on April 3, starting at 165.90.

Ad-Supported Service

Spotify also has a free, advertiser-supported streaming music service. It ended the quarter with 99 million monthly active users of its free service, up from 90 million in the fourth quarter. The free service is an important source of potential paying subscribers.

The company said it finished the quarter with 170 million total monthly active users, in line with estimates.

On a year-over-year basis, the number of premium users rose 45%, while total users increased 30%.

The Swedish company reported an operating loss of 41 million euros, vs. Wall Street's expectations for a loss of 65 million euros. In the year earlier period, it lost 139 million euros.

Spotify Misses Revenue Target

Revenue rose 26% year over year to 1.14 billion euros, which missed the consensus view of 1.15 billion euros.

Spotify's premium service accounted for 91% of revenue in the first quarter.

Its gross profit margin was 24.9% in the March quarter, above the high end of its guidance range of 23% to 24%.

Spotify said the percentage of subscribers who cancel its premium service is trending down.

"While we don't plan to disclose premium churn on an ongoing basis, our average monthly premium churn rate for the quarter fell below 5%, a significant milestone," the company said in a news release. It credited the popularity of its family and student plans for improving subscriber retention.

Spotify expects to end the June quarter with 81 million premium subscribers, based on the midpoint of its guidance. It is targeting 177.5 million total monthly active users in the second quarter.

It expects to end 2018 with 94 million premium subscribers and 203 million total monthly active users, based on the midpoint of guidance.

Spotify Touted On Wall Street, Called Netflix For Music

The post Spotify Disappoints With In-Line First-Quarter Subscriber Numbers appeared first on Investor's Business Daily.