France’s Deezer pledges to turn a profit by 2025

By Mathieu Rosemain

PARIS (Reuters) – French music streaming platform Deezer’s first-half adjusted gross revenue rose 9.1% from a 12 months earlier, led by a surge in gross sales in its residence nation that firmed up its aim to show a revenue by 2025, the corporate mentioned on Wednesday.

The group, as soon as championed in France as being one of many first and most promising so-called unicorns, firms valued at 1 billion euros or extra, is striving to persuade traders of its capability to show a revenue by 2025 by specializing in key markets corresponding to France, Brazil and the Netherlands, and new providers.

Gross revenue elevated to 45 million euros ($44.4 million) from 42 million a 12 months earlier, whereas complete gross sales rose by 12% over the interval to 219 million euros, Deezer mentioned in an announcement.

This was primarily attributable to a achieve within the common income per person (ARPU), which jumped by 12.4% to three.9 euros. Deezer’s variety of direct subscribers in France, the place it generates about 60% of its consolidated income, rose to three.3 million from 3 million a 12 months earlier.

But the full variety of subscribers fell by shut to three% to 9.4 million.

“By focusing our enterprise on giant engaging markets and coming into new markets with a partnership-led mannequin, we’re satisfied we are able to seize a fair proportion of the booming streaming market and proceed enhancing our profitability to achieve breakeven by 2025,” Chief Government Officer Jeronimo Folgueira mentioned.

Affected by comparability to larger rivals corresponding to Spotify and Apple Music, Deezer hasn’t but recovered from its painful debut on Euronext’s Paris inventory change in July, which noticed its shares plummet by 35% within the first few hours after its itemizing.

The inventory has misplaced 65% of its worth since its first buying and selling day, valuing the corporate at 472 million euros ($466.38 million), in comparison with Spotify’s market capitalisation of $18.7 billion.

($1 = 1.0120 euros)

(Reporting by Mathieu Rosemain; Enhancing by Elaine Hardcastle and Emelia Sithole-Matarise)