After a month of controversy involving podcast host Joe Rogan, Spotify Technology SA disclosed a more immediate business problem: its growth in the first quarter of the year.

The company said it would end the first quarter with 418 million total users and 183 million paid subscribers, shy of Wall Street forecasts on both numbers. The company didn’t provide a reason for the shortfall, though it did say the uncertain environment of COVID-19 made it harder to forecast.

Spotify shares slipped as much as 23% in after-hours trading, erasing much of the gains made over the past two years. Spotify had added 135 million users since 2020, almost half of whom pay for the service. But the uneven return to business as usual has made it hard for companies to forecast their growth. Netflix also forecast a slow start to 2022, blaming a pandemic hangover.

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“Given the extraordinary operating circumstances we currently face with respect to the impact of COVID-19, there is a greater likelihood of variances,” the company said in a letter to shareholders.

The company didn’t say whether a recent artist boycott of Spotify is impacting its business. Musicians Neil Young, Joni Mitchell and others have pulled their music from Spotify to protest Rogan, whom they say is peddling misleading information about the pandemic and Covid-19 vaccines. Spotify has pledged to put advisories on podcasts that discuss Covid-19. But more musicians and hosts have joined the boycott, and social media users have said they are deleting the app.

The company’s results for 2021 exceeded analysts’ forecasts. It closed the year with 406 million users, and delivered positive operating income last year for the first time.  Spotify credited India, Indonesia and Latin America with driving a lot of its growth in the most-recent quarter.

Podcasting boosted the company’s advertising business. Advertising sales accounted for 15% of revenue in the final quarter of 2021, a new high for the company. Spotify said advertising rates were going up and that its growing audience has also created more advertising inventory.

Yet selling more advertising won’t matter if Spotify doesn’t attract more users.

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—Bloomberg News