Yahoo Finance media reporter Allie Canal joins the Live Show to discuss the decline of Spotify's share and what investors should expect in the Q1 earnings report.
SEANA SMITH: Spotify shares trading lower ahead of its first quarter earnings release tomorrow morning. Yahoo Finance's Alexandra Canal is here with a preview. Ali, what can we expect?
ALEXANDRA CANAL: Well, I think the big things that investors will be watching will center on margin improvements and any conversation surrounding those subscription fees, right? We heard last quarter there weren't any updates as it related to pricing. But I think with competitors hiking prices and especially this big profitability push, higher prices do seem likely down the line.
And on top of that, Spotify has made very heavy investments totaling as much as $1 billion in the podcast space, so potentially higher prices could offset that, since those investments have been a serious drag on margins. Even during the last earnings call, CEO Daniel Ek admitted that he overinvested, but that the company will be a lot stricter when it comes to that spending this year.
They've already cut jobs, eliminated certain initiatives, like its live audio initiative, called Spotify Live. And on top of that, they've continued to demonstrate growth with monthly active users topping 500 million last month. So overall, Wall Street is very bullish on those possible near-term catalysts.
Now, there will be some headwinds here, like macro pressures, especially as it relates to advertising, also foreign exchange as $1 continues to remain strong relative to other currencies. But the outlook is bright. Here's a metrics to look out for tomorrow morning. According to Bloomberg consensus estimates, we're still looking at a loss per share but an improvement over the fourth quarter. Total monthly active users expected to come in at 502 million. But I do think, again, investors will closely be listening on the call for any updates and commentary on margin improvements, pricing, and that macro environment.
SEANA SMITH: All right. Certainly, we will be listening in for that. Share, so far, since the start of the year, went up just around 60%.
ALEXANDRA CANAL: Yeah, 60%.
SEANA SMITH: So certainly, an outperformer since January 1st. All right, Ali Canal, great stuff. Thank you.