Spotify Technology SA sank as a flat margin outlook failed to energize investors who have stuck with the stock through a rough start to the year amid its controversy with podcast host Joe Rogan.
Gross margin is expected to stay the same this quarter relative to last, the company said in a statement Wednesday. Analysts honed in on the outlook for margins on Spotify’s earnings call and in research reports.
In addition, the company’s paid subscriber forecast for the current quarter fell just short of analyst estimates. Spotify projected it will have 187 million premium subscribers at the end of the second quarter, compared with analyst estimates of 189.4 million. The streaming company said it will lose another 600,000 subscribers in the current period due to its withdrawal from Russia after the company suspended service in the country last month.
Over the first quarter, paid subscribers totaled 182 million, in line with the 182.7 million projected by analysts. This includes a loss of 1.5 million customers from Russia. Ad-supported users totaled 252 million, also above projections of 243.4 million.