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Spotify (SPOT) Reports Q4 Revenues of EUR1.855B; Provides Q1 & FY20 Revenue Outlook

February 5, 2020 6:05 AM EST

Spotify (NYSE: SPOT) reported Q4 EPS of (EUR1.14), versus EUR0.36 reported last year. Revenue for the quarter came in at EUR1.86 billion, versus EUR1.73 billion reported last year.

Dear Shareholders,

The business continued to perform well in 4Q19. For the third consecutive quarter, total MAU growth accelerated while Subscribers, Revenue, and Gross Margin all met or exceeded our expectations. We continue to see exponential growth in podcast hours streamed (up approximately 200% Y/Y) and are now seeing clear indications that podcast usage is driving increased overall engagement and retention. We have seen early indications that our investments in podcasts are having a positive impact on conversion of free to paid users. Overall, the business performance remains strong, and we believe we are well positioned for growth in the coming year.

GUIDANCE:

Spotify sees Q1 2020 revenue of EUR1.71-1.91 billion.

Spotify sees FY2020 revenue of EUR8.08-8.48 billion.

With three consecutive quarters of accelerating MAU growth and another year of record net subscriber additions behind us, we are enthusiastic about the underlying trends in the business. From history, we know that MAU growth tends to be a leading indicator of future subscriber additions, which is then followed by revenue gains in both premium and ad-supported users. While we believe these trends will continue moving forward, we have been appropriately conservative regarding our 2020 guidance as our data, particularly around the benefits from podcasts, is still reasonably new.

On the cost side, we have been consistent in our messaging. Any decision to accelerate our investment in podcast and technology spend should be viewed as an indication of our belief that our strategy is having tangible results. We have gained even more confidence in the data, particularly around the benefits from podcasts, and as a result, 2020 will be an investment year.

For earnings history and earnings-related data on Spotify (SPOT) click here.



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