Spotify Technology S.A. SPOT, +3.73% reported Wednesday a narrower-than-expected fourth-quarter loss, as revenue and monthly active users (MAUs) topped forecasts, but provided a downbeat first-quarter revenue outlook. The U.S.-listed shares of the Luxembourg-based digital music service dropped 6.7% in premarket trading, after surging 9.5% over the past two days. Net losses widened to EUR125 million ($150.3 million), or EUR0.66 a share, from EUR101 million, or EUR0.58 a share, in the year ago period. The FactSet per-share loss consensus was EUR0.51. Revenue grew 9.8% to EUR2.17 billion ($2.61 billion), beating the FactSet consensus of EUR2.14 billion, as MAUs increased 27% to 345 million to top expectations of 343.8 million. Gross margin of 26.5% was above the top end of the company’s guidance range, while free cash flow fell 56% to EUR74 million but beat the FactSet consensus of EUR46.5 million. For the first quarter, the company expects revenue of EUR1.99 billion to EUR2.19 billion, just shy of the FactSet consensus of EUR2.20 billion. The stock has run up 45.9% over the past three months through Tuesday, while the S&P 500 SPX, +1.39% has gained 13.6%.
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