Music streaming service Spotify has forecast that revenue and paid subscribers will miss Wall Street estimates this quarter, due to uncertainty over how long the coronavirus crisis will last.
Shares of the company were down 7% in premarket trading.
The company has seen a sharp rise in paid subscribers during the pandemic as people have been locked down at home and in the fourth quarter beat revenue estimates as it hit 155 million paid subscribers for its premium service.
While advertising was hit by the pandemic, it had little impact on subscriber growth, and may actually have contributed to pulling forward new signups, Spotify said in a statement.
It said that total monthly active users rose 27% to 345 million.
"We do believe that probably some of the growth in 2021 may have been pulled forward into 2020," Chief Financial Officer Paul Vogel said.
"Russia for example performed extremely well in 2020 while a lot of our expectations initially were we wouldn't really hit our full stride there until 2021," he added.
While Spotify’s expansion drive has made the service available in 93 countries, about 40% of its paid subscribers come from Europe.
Premium subscribers, who account for most of Spotify’s revenue, were up 24% in the fourth quarter from a year earlier, beating estimates of 153.26 million.
However, it expects total premium subscribers in the range of 155 million to 158 million for the first quarter, whereas analysts were expecting it to hit 163.5 million.
The company expects quarterly revenue of €1.99 billion to €2.19 billion, short of expectations of €2.23 billion.