shares fell Wednesday despite the streaming platform reporting a sharp increase in users during the first quarter. Weaker-than-expected guidance appears to be the culprit.
Shares of Spotify were down 6% to $103.76 on Wednesday.
) said monthly active users rose 19% in the quarter from a year earlier to 422 million. The number included 3 million extra users who were logged out during a service outage and then created new accounts to log back in, the company said.
The company said even without those users it still believes that MAUs would have reached 419 million in the first quarter, exceeding its expectations by about 1 million.
Spotify said its premium subscribers rose 15% in the first quarter to 182 million. Excluding the involuntary churn of about 1.5 million subscribers as a result of the company’s exit from Russia, “growth was above expectations and aided by outperformance in Latin America and Europe,” the company said.
Average revenue per user in its premium business rose 6% to €4.38, the company added.
Total revenue in the quarter rose 24% to €2.66 billion. Profit in the quarter was €131 million, up from €23 million a year earlier.
For the second quarter, Spotify said it expects monthly active users of 428 million, below analysts’ estimates of 428.1 million, according to FactSet. Total premium subscribers were forecast at 187 million, below forecasts that called for a little more than 189 million.
The forecast, Spotify said, assumes it will lose an additional 600,000 subscribers from its full closure of Russian operations in April.
The company also said it expects total revenue in the second quarter of €2.8 billion, assuming a 6% foreign exchange tailwind to year-over-year growth, and gross margin of 25.2%.