Spotify share price: 3 things we learnt from Q1 results

Spotify share price is up after beating Wall Street expectations. These are three lessons investors learned about Spotify’s Q1 earnings.

Spotify’s Q1 revenue and subscribers grew, but Spotify Q1 earnings were down

Spotify’s Q1 results were helped by an increase in subscriber numbers. The amount of paid subscribers grew 32% to 100 million members with offers that included subscriptions to Hulu. Spotify’s Q1 revenue of $1.69 billion topped financial experts’ $1.64 billion projection. Spotify’s Q1 profits also climbed with international growth of 2 million new subscribers in India. While Spotify’s Q1 profits beat estimates, Spotify’s Q1 earnings were disappointing at -$0.89 a share because of operating expenses.

Spotify’s Q1 results show a serious competition with Apple

Spotify’s Q1 earnings were high, but faces stiff competition from Apple Music. Apple’s rival music streaming service currently has more paid US subscribers than Spotify. However, chief executive officer, (CEO), Daniel Ek, isn’t threatened by the competition.

‘Competition is really not a big factor for us,’ said Ek.

While Spotify doesn’t consider Apple competition, Spotify filed an antitrust complaint against the tech company with the European Union(EU). The streaming company claims that Apple is unfairly charging an extra tax to Spotify on purchases made through its payment system. Ek wouldn’t comment on the complaint, but said that the filing was warranted.

‘What I can say personally from speaking to lots of regulators [is that] this is the moment when these issues need to be debated,'said Ek.

Spotify’s Q2 profits may depend on podcasts

In its Q2 guidance, Spotify projected revenue between $1.69 billion-$1.91 billion. Spotify wants to expand beyond music into podcasts with $400 million purchases of three podcast companies. The corporation wants to move into podcasts to build more revenue.

‘Over time, our ambition is to develop a more robust advertising solution for podcasts that will allow us to layer in the kind of targeting, measurement, and reporting capabilities we have for the core ad-supported business,’ said Spotify.

Spotify’s Q1 results show that despite a mixed revenue report, the corporation is still the most dominant music streaming company.