Spotify Q1 2021 earnings Shifting headwinds
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The 20,000 Foot View: The first quarter of the year is usually a slow one for Spotify, but 2021 saw a few metrics slowing more than in previous years. There were lots of solid performance metrics in Spotify’s results and a slew of new product announcements, but there were also signs of a coming slowdown driven in large part by wider industry headwinds.
Key Insights
- Spotify added million monthly active users in 2021 to reach million, compared to the million it added one quarter earlier. This was higher than the million and million added in and 2020 respectively
- Spotify finished 2021 with million subscribers. It added fewer subscribers in 2021 (three million) than it did in 2020 (six million), and was the first year since 2015 it added less than four million in the first quarter
- European subscribers were up, while ad-supported users were down. North America saw continued solid subscriber growth as did ‘rest of world’; however, Latin American subscribers were down despite Mexico delivering strong growth
- Revenues and margin maintained good trajectories, but revenue growth was below market benchmarks. Total revenue was up year-on-year, while major label streaming revenue was up
- Ad revenue was up year-on-year, in line with Facebook but below YouTube Quarter-on-quarter ad revenue was down by compared to falls of for YouTube and for Facebook
- The share of monthly active users that engaged with podcast content remained at around representing million podcast monthly active users, up from million quarter-on-quarter. Consumption and revenue growth came from better engagement of established users
Companies and brands mentioned in this report: Amazon Music, Alphabet, Betty Labs, Deezer, Facebook, Peloton, Spotify, TikTok, YouTube