Spotify Technology SA’s advertising revenue more than doubled in the most recent quarter, helped by growth in its podcast business, but the company added fewer total users than expected.
Though at-home listening took off during the lockdowns, executives have said the company faces uncertainty as the emerging markets it is relying on for new user growth endure Covid-19 increases and listeners in more established markets emerge from lockdowns and move on to activities outside their homes.
“While I’m disappointed that our [user] growth was softer in the last half of Q1 and the first half of Q2, the good news is that we’ve seen that trend line reverse, and all the leading indicators I’m seeing show that we are back on track,” Spotify Chief Executive Daniel Ek said on a call with investors.
Shares in the Swedish streamer fell 9% Wednesday to $216.50 in New York morning trading.
As of the quarter ended June 30, Spotify had 365 million monthly active users, up 22% from a year earlier and just shy of the company’s forecast. The company said that Covid-19 weighed on performance in several markets—mainly India, Brazil and Southeast Asia—and that it paused marketing campaigns in some instances.
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