Spotify surges 17% after reporting 31% jump in paid subscribers amid coronavirus lockdowns

• Spotify surged as much as 17% on Wednesday after reporting a 31% jump in paid subscribers amid the coronavirus lockdown.
• The Swedish company said "Every day now looks like the weekend" as consumer listening habits change dramatically due to the coronavirus pandemic.
• Spotify reported fiscal first quarter earnings that beat earnings estimates but missed revenue estimates, and lowered its fiscal year 2020 revenue guidance.
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Shares of Spotify surged as much as 17% to $163.94 on Wednesday after the Swedish music streaming company reported a 31% jump in paid subscribers amid the coronavirus lockdown.

The company reported fiscal first quarter earnings that beat earnings-per-share estimates but missed revenue estimates, and lowered its fiscal year 2020 revenue guidance.

Here are the key numbers:

• Revenue: €1.85 billion, versus the €1.86 billion estimate
• GAAP earnings per share: -€0.20, versus the -€0.49 estimate
• Total monthly active users: 286 million, versus the 283 million estimate
• Premium subscribers: 130 million, versus the 129 million estimate
• Fiscal 2020 revenue outlook: €7.65 billion to €8.05 billion, versus the €8.19 billion estimate

The company said in a shareholder letter that "every day now looks like the weekend" as consumer listening habits change dramatically due to the coronavirus pandemic and related stay-at-home orders.

For example, podcasts saw a decline in listens as fewer people travel to work, but music saw a double-digit increase in listens across activities like cooking, doing chores, family time, and relaxing at home.

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Spotify also detailed that it saw a decrease in daily active users and consumption in areas hit hard by the coronavirus like Italy and Spain. But listening figures have since rebounded, "and in many markets, consumption has meaningfully recovered," it said.

The company was surprised it didn't see a fall in premium subscribers.

"For example, when we saw consumption starting to decline we would have assumed that [monthly active users] and Paid Subscribers would be negatively impacted, but that wasn't the case," it said in its report. "In fact, both new and reactivated MAUs grew substantially even during lockdown periods in major markets."

The company experienced a more than 20% drop in advertising sales in the last three weeks of the quarter because of the coronavirus. Overall for the quarter, advertising revenue grew 17% year-over-year to €148 million.

Spotify ended the quarter with €1.8 billion in cash and equivalents, and "no material outstanding indebtedness."