Fly Intel: What to watch in Spotify earnings report

Spotify (SPOT) is scheduled to report results of its first quarter before market open on Monday, April 29, with a conference call scheduled for 8:00 am ET. What to watch: 1. USER METRICS: Spotify's monthly active users, or MAUs, are a measure of its popularity and growth potential. In the fourth quarter, Spotify reported 207M MAUs, up 29% year-over-year, and 116M ad-supported MAUs, up 24% year-over-year and 6% quarter-over-quarter. In addition, the company reported that Premium Subscribers grew to 96M, up 36% year-over-year. Watch for updated numbers in the report, as well as management commentary on user engagement. 2. GUIDANCE: With its last report, Spotify guided to Q1 revenue of EUR1.35B-EUR1.55B, up 19%-36% year-over-year. The company also forecast Q1 total MAUs of 215M-220M, up 24%-27% year-over-year, and total Premium Subscribers of 97M-100M, up 29%-33% year-over-year. 3. INITIATIVES, PARTNERSHIPS, ACQUISITIONS: Since Spotify's direct listing in April 2018, the company has taken on a number of initiatives and formed partnerships to attract consumers and improve user experience. Along with its February earnings announcement, the company said it had entered into definitive agreements to acquire Gimlet Media, a producer of podcast content, and Anchor, a company focused on podcast creation, publishing, and monetization services. Terms of the transactions were not disclosed. Additionally, in February, Spotify launched in India with the app available to download for free or with an upgrade to Spotify Premium for INR119 per month. In March, Spotify announced an expansion of its strategic relationship with Samsung Electronics (SSNLF) by providing users with frictionless access to Spotify on Samsung mobile devices. Spotify began to be pre-installed on millions of new Samsung mobile devices globally on March 8. The company also announced in March that it would add Hulu to the regular $9.99-per-month Spotify Premium membership. Hulu is owned by a joint venture with Disney (DIS), 21st Century Fox (FOX), Comcast (CMCSA) and AT&T (T). Additionally in March, Spotify announced that it had entered into a definitive agreement to acquire Parcast, a storytelling-driven podcast studio. Terms of the transaction were not disclosed. 4. ANALYST VIEW: On Friday, Morgan Stanley analyst Benjamin Swinburne said that competition concerns and perceived label tensions have recently weighed on Spotify shares, but he reiterated his Overweight rating and $170 price target on the stock ahead of the company's upcoming Q1 report. He continues to see a significant runway for growth at Spotify given its leadership position in Android, the largest mobile ecosystem globally, as well as its higher engagement level relative to competitors such as Amazon Music (AMZN). Streaming now accounts for 47% of global music industry revenue, per IFPI, and should surpass 50% of music industry revenues in 2019, noted Swinburne.