Spotify Technology (SPOT) got more bad news Wednesday after the streaming service, which has been embroiled in controversy over its Joe Rogan podcast, saw its shares slide after offering disappointing monthly user guidance in its fourth-quarter results.
Shares of the Luxembourg company were falling 15% to $162.10 in after hours trading after closing down 5.8%.
No Annual Forecast
Spotify reported a fourth-quarter adjusted loss of 21 cents a share, but beat analysts' expectations of 51 cents a share. Revenue totaled $3.03 billion, while Wall Street called for $2.98 billion.
Fourth quarter advertising revenue grew 40% from a year ago to $445 million.
Total monthly users for the quarter came to 406 million and the company said it had 180 million paid subscribers. Expectations were for 400 million to 407 million MAUs and 177 million to 181 million paid subscribers.
Spotify said in had 3.6 million podcasts on the platform at the end of the fourth- quarter, up from 3.2 million at the end of previous quarter, with a double-digit increase in the number of MAUs that engaged with podcast content compared to the third quarter.
For the first quarter 2022, Spotify forecasted 418 million MAUs, falling short of analysts' forecasts for 422 million. The company also did not provide an annual forecast, something they had done in the past.
Spotify has been on the receiving end of harsh criticism due to its star podcaster Joe Rogan, host of the "The Joe Rogan Experience."
Rocker Neil Young requested that his music be taken off of Spotify, in protest of COVID-19 misinformation spread on Rogan's podcast, for which the streaming service reportedly paid $100 million dollars.
Exodus Over Rogan Podcast
Fellow rock legend Joni Mitchell had her music removed in solidarity, as did Bruce Springsteen, songwriter and E Street Band member Nils Lofgren, and the alternative rock group Belly changed its profile image to “DELETE SPOTIFY” and mentioned it was figuring out how to get its music off the platform.
Young's former bandmates David Crosby, Stephen Stills and Graham Nash, also asked to have their work removed from Spotify.
The company has launched a series of initiatives to combat COVID-19 misinformation.
This included the creation of a COVID-19 Hub that provides “easy access to data-driven facts, up-to-date information as shared by scientists, physicians, academics and public health authorities around the world, as well as links to trusted sources.”
For his part, Rogan, who said he was a Neil Young fan, indicated that he will do more research in the future to “balance things out.”
On Tuesday, Morgan Stanley analyst Benjamin Swinburne lowered the firm's price target on Spotify to $300 from $350, while keeping his overweight rating.
Swinburne said the Rogan controversy is not the first of its kind and "likely will not be the last," but over the long-term he believes Spotify's global scale will help it navigate the challenges.
