Spotify to Hold Investor Meeting to Hype Wall Street’s Enthusiasm

The audio streaming service Spotify Technology SA will host its first investor day since going public in 2018 on Wednesday, hoping to stoke Wall Street’s enthusiasm regardless of the slowing world financial system.

The firm’s inventory has tumbled 53 p.c thus far in 2022, worse than the 24 p.c drop within the S&P 500 communication providers sector index, which incorporates Spotify and different media and social community firms. Still, Spotify has fared higher than some streaming providers like Netflix, whose inventory has plunged 67 p.c this yr because it misplaced subscribers for the primary time in additional than a decade.

Spotify continued so as to add customers and paying subscribers within the first quarter, regardless of suspending its service in Russia and weathering an issue over Joe Rogan’s podcasts.

The service reported the variety of month-to-month customers reached 422 million within the first quarter, forward of the consensus estimate. Advertising was up 31 p.c from the prior yr, to 282 million euros (roughly Rs. 2,400 crore), although wanting Wall Street projections.

Jefferies analyst Andrew Uerkwitz expressed concern about fallout from Russia’s assault on Ukraine, which Spotify mentioned would end result within the lack of about 5 million listeners in Russia. The influence, he wrote, would possibly transcend subscriber disruptions.

“It’s clear the geopolitical factors are impacting willingness to spend on advertising (not just SPOT),” Uerkwitz wrote in an investor word.

One media analyst, Michael Nathanson, warned concerning the long-term progress of digital promoting amid rising inflation, a looming recession, the tip of a pandemic-fueled digital advert spending, and the Ukraine warfare, as he highlighted Snapchat father or mother Snap Inc’s latest steering.

“We believe Snap’s warning … that macroeconomic conditions have deteriorated and they will likely miss the low end of their 2Q revenue and profit guidance – reflects softening advertising demand across the industry,” Nathanson wrote of the corporate’s announcement in late May that it will miss quarterly income and revenue targets.

© Thomson Reuters 2022