Spotify’s revenue is projected to grow at a slower tempo this year, as the music streaming site readies for its public listing next week.
The technology company said yesterday that it expects revenue to grow between 20 and 30 per cent to as much as €5.3bn (£4.6bn) in 2018, a rate slower than the 39 per cent jump recorded for last year.
The comparative growth in 2017 was boosted by improved licensing deals with big record companies. This year Spotify will also feel the negative effects of foreign exchange rates, taking a hit of up to €300m.
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Spotify will list on the New York Stock Exchange next Tuesday. Its current value is estimated to be more than $20bn (£14bn).
The Sweden-based company will aim to raise $1bn in its float. The cost of the direct listing will be up to €40m, which will be expensed in the second quarter and contribute to the company’s annual loss of between €230m and €330m.
Its debut on the stock market will differ from the usual format, as the company will not issue any new shares. The process, known as a direct listing, means that the company and its investors or employees can sell any shares they own to the public.
The shares will not be supported by underwriters, meaning the price could potentially be volatile in the initial stages.
Today’s update also predicted that monthly active users of Spotify will soar to over 200m this year, while even more people are expected to sign up to be premium subscribers with an increase of at least 30 per cent.
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