Spotify's latest Quarter 1 earnings release shows that the company gained more subscribers amidst its exit in Russia and the Joe Rogan podcast controversies.
Spotify, in numbers, has undoubtedly been affected in halting its full operations in Russia. The music-listening platform lost 1.5 million paid subscribers as it responded to support Ukraine against the turmoil caused by the specialized military operations.
Spotify Subscribers Increase
In the first three months of the year, the number of people who use Spotify every month rose by 19% or to 422 million. That's a gain of 16 million people.
It was even better than expected when it came to monthly active users (MAU) growth, even without the "one-time benefit" of 3 million new users who set up new accounts to use Spotify after an outage in early March.
"Our business exhibited strength and resiliency in Q1. Nearly all of our key metrics surpassed guidance, led by MAU outperformance, healthy revenue growth, and better Gross Margin. Excluding the impact of our exit from Russia, subscriber growth exceeded expectations as well. Overall, we are very pleased with the performance of the business and remain highly encouraged by the traction we are seeing," said Spotify.
This means Spotify now has 182 million paying customers, which is more than any other music service, this data shows that the platform is consistently increasing its subscribers by 15% year over year.
The music streaming service stated that enormous gains contributed by Latin America and Europe were beyond what they expected.
Ultimately, Spotify reported a revenue value of €2.66 billion, up 24%, which was in line with expectations. Ad-supported revenue grew 31% year over year to €282 million. The Swedish company also posted a net income of €131 million, translating into earnings per share of €0.21 per diluted share.
Spotify's Exit in Russia
Spotify's growth was better than expected, except for the "involuntary churn" of Russian subscribers in which they experienced 1.5 million disconnects from them closing down operations in the country.
As The Verge reports, Spotify only recently launched its services in Russia, and later called it its most successful new market launch to date.
However, Spotify announced that it would be ending its services there at the end of March, near the end of the financial quarter.
Spotify said that it expects all services to be shut down by April. During a wind-down, 1.5 million people have been cut off, and it expects to see 600,000 more in April for a total of 2 million.
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Spotify Controversy With Joe Rogan
When high-profile artists like Neil Young and Joni Mitchell said that Joe Rogan was using his Spotify podcast to spread misinformation about vaccines, they took their music off the platform.
The podcast host of "The Joe Rogan Experience" who has a $200 million-plus deal with the company was boycotted because of claims that he spread COVID misinformation on the show.
It was soon trending on Twitter during the height of the controversy with the hashtag #SpotifyDeleted.
However, despite the hot mess it made on Twitter, Spotify subscribers still gained in numbers. This was quite a surprise.
More incredibly, Spotify expects 187 million Premium subscribers in the second quarter of 2022. Additionally, they are assuming an additional 600,000 disconnects and more as a result of the full closure of Russian operations to start hitting this April.
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