Spotify reports £110 million of net loss in the fiscal fourth quarter

Spotify Technology S.A. (NYSE: SPOT) said on Wednesday that its revenue in the fiscal fourth quarter came in better than expected. Its loss in Q4, however, remained wider than what analysts had anticipated. Spotify also gave dovish guidance for the first quarter on Wednesday.

The NYSE-listed shares of Spotify were reported about 7% down in premarket trading on Wednesday. Including the price action, Spotify is now exchanging hands at £234.81 per share after recovering from a low of £86.72 per share in March 2020 when the Coronavirus pandemic wreaked havoc on the global financial markets.

The COVID-19 crisis has so far infected more than 104 million people worldwide and caused over 2.2 million deaths.

Spotify’s Q4 financial results versus analysts’ estimates

Spotify said that it concluded the fourth quarter with £110.21 million of net loss that translates to 58.19 pence per share. In the same quarter last year, it had reported a narrower £89.05 million of loss or 51.14 pence per share.

At £1.91 billion, the Stockholm-headquartered company’s revenue saw a 9.8% year over year growth in the recent quarter. Its monthly active users (MAUs), on the other hand, registered a 27% annualised growth to 345 million.

According to FactSet, experts had forecast the company to record £1.89 billion of revenue in Q4. Their estimate for per-share loss stood at a smaller 44.96 pence. Analysts had expected Spotify to report 343.8 million monthly active users at the end of the fourth quarter.  

In separate news, Japanese multinational Sony Corporation also published its quarterly earnings report on Wednesday.

Spotify valued its free cash flow at £65.24 million that represents a 56% decline from last year but was better than £41 million that analysts had predicted. At 26.5%, gross margin topped Spotify’s guidance in the recent quarter.

Spotify’s guidance for the fiscal first quarter

For the fiscal first quarter, the audio streaming and media services provider now forecasts its revenue to fall in the range of £1.75 billion to £1.93 billion. In comparison, FactSet Consensus for its revenue in Q1 currently stands at £1.94 billion.

In an announcement in December, Spotify said that it plans to roll out crypto services. The U.S. listed shares of Spotify performed massively upbeat in the stock market last year with an annual gain of more than 100%.

At the time of writing, the NYSE listed company has a market cap of £47.36 billion.