1Q18 TAKEAWAYS
- Not much to get excited about: SPOT beat the midpoint of its guided metrics, but was largely inline vs. consensus that was positioned toward the top-end of its guidance range. Note that SPOT issued its 1Q18 guidance on March 26th, so it's surprising that it didn't give itself more breathing room given how late in the quarter it was issued. There wasn't anything particularly noteworthy in SPOT's reported results outside of an acceleration in ad revenue growth and some improvement in churn, but we're still in the process of reviewing the 6-K it released this morning. SPOT's 2Q18 guidance was mixed vs. consensus, with revenue guidance issued at a very wide range on both a reported and FXN basis, which doesn't really inspire confidence.
- Where's the Data? It's pretty odd that SPOT didn't provide updates for many of the quarterly metrics provided in its F-1. We didn't get any 1Q18 data on content hours, Ad MAU geographic mix, and most notably churn, which SPOT suggested it wasn't planning to provide moving forward. Mgmt did provide the churn metric during its earnings call when asked directly though (declined to 4.7%). Still, this is an odd development considering that Elk chose to end the call preaching about being "as transparent as possible".
Let us know if you have any questions or would like to discuss in more detail.