Spotify’s (SPOT) results get a rocky reception, as it hits subscriber growth at a €394m expense | City A.M.

In its second financial report since going public, Spotify confirmed expectations that it won’t be profitable any time soon.

The music streaming app, which listed on the New York Stock Exchange directly in April, revealed €1.27bn (£1.13bn) in revenue across its second quarter this afternoon, up 26 per cent year-on-year and in line with analyst estimates as polled by Thomson Reuters.

Monthly subscribers to its paid-for Premium service, which accounts for the bulk of the company’s revenue at €1.15m this quarter, rose to 83m at an increase of 30 per cent, topping the average estimate of 82m. By comparison, Apple’s last-reported user numbers for its premium Apple Music service were 40m.

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Spotify’s total operating loss came in at €90m with a net loss of €394m, and worried investors by reporting a loss of €2.20 on earnings per share compared to estimates of €0.68. This is largely due to the hefty royalties which the company pays out to record companies.

Spotify said in a statement that a new data policy implemented in the second quarter “slowed our revenue growth”, causing the app to correct its course early in the third quarter.

“We did see some GDPR disruption across our European markets during [the second quarter] but seem to be largely past that now,” it added.

Though Spotify’s share price dropped around four per cent in pre-market trading as the results were released, it has since recovered to a positive 1.55 per cent rise.