Fly Intel: What to watch in Spotify earnings report

Spotify (SPOT) is scheduled to report results of its fourth quarter before market open on Wednesday, February 6, with a conference call scheduled for 8:00 am ET. What to watch: 1. USER METRICS: Spotify's monthly active users, or MAUs, are a measure of its popularity and growth potential. In the third quarter, Spotify reported 191M MAUs, up 28% year-over-year, and 109M ad-supported MAUs, up 20% year-over-year and 8% quarter-over-quarter. In addition, the company reported that Premium Subscribers grew to 87M, up 40% year-over-year. Watch for updated numbers in the report, as well as management commentary on user engagement. 2. GUIDANCE: With its last report, Spotify guided to Q4 revenue of EUR1.35B-EUR1.55B, up 18%-35% year-over-year. The guidance included a negative impact of approximately EUR30M from foreign exchange rate. The company also forecasted Q4 total MAUs of 199M-206M, up 24%-29% year-over-year, and total Premium Subscribers of 93M-96M, up 30%-36% year-over-year. 3. INITIATIVES AND PARTNERSHIPS: Since the Spotify's direct listing in April, the company has taken on a number of initiatives and formed partnerships to attract consumers and improve user experience. In October, Garmin International (GRMN) announced integration with Spotify on compatible Garmin music watches. Following the announcement, the company launched a Wear OS app and partnered with Fossil (FOSL). In a blog post, Spotify said, "Spotify's new app for smartwatches on Wear OS by Google (GOOG, GOOGL) takes the work out of your hands literally and puts it on your wrist, leaving you free to run, dance, shop, socialize-and control your music at the same time. We've also partnered with Fossil Group to bring the Spotify experience in a standalone app for Wear OS by Google smartwatches to even more users. Starting in November, Spotify will be auto-installed on all Fossil Gen 4 Smartwatches and Michael Kors (KORS) Access Runway Smartwatches." Additionally in October, the company announced its playlist submission feature was officially out of beta saying, "A few months ago, we unveiled a beta feature in the Spotify for Artists tool that gives artists, labels, and teams the ability to share new music directly with our editorial team for playlist consideration. Since the feature became available in July more than 67,000 artists and labels have submitted music." The company also announced in October that it had partner with Google Home to give Spotify Premium for Family account owners in the U.S. a Google Home Mini as part of their subscription. In November, Spotify also announced it was launching in 13 new markets in the Middle East and North Africa bringing its global footprint to 78 markets. The company said, "Spotify is launching in MENA with a fully Arabic user experience, offering music fans the best of local and international music, and a wealth of locally-curated playlists, including Today's Top Arabic Hits, Oriental Chill Vibes, and Arabic EDM. Users in MENA can enjoy Spotify for free, or can subscribe to Spotify Premium for the ultimate Spotify experience."

Sign Up

Get the InvestingChannel
Free e-Letter Today

Learn More

Independent market opinion, analysis and ideas - delivered every business day

Premium market opinions, analysis, and ideas - delivered every business day

Editor's Picks