December 8, 2022

The logo of French music streaming platform Deezer is seen before the opening ceremony of the company’s initial public offering (IPO) on the Euronext stock exchange in the La Defense business and financial district of Courbevoie near Paris, France, July 5, 2022. REUTERS / Benoit Tessier

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PARIS (Reuters) – French music streaming platform Deezer (DEEZR.PA)’s adjusted gross profit in the first half rose 9.1% from a year earlier, driven by an increase in sales in its home country that bolstered its goal of meeting its targets. The company said Wednesday it will turn earnings around by 2025.

The group, promoted in France as one of the first promising, companies valued at €1 billion or more, is striving to convince investors that it can turn a profit by 2025 by focusing on key markets such as France, Brazil and the Netherlands, and new services.

Gross profit increased to 45 million euros ($44.4 million) from 42 million a year ago, while total sales rose 12% during the period to 219 million euros, Deezer said in a statement.

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This is mainly due to the increase in average revenue per user (ARPU), which jumped 12.4% to €3.9. Deezer’s direct subscribers in France, where it generates about 60% of its consolidated revenue, rose to 3.3 million from 3 million a year ago.

However, the total number of subscribers decreased by nearly 3% to 9.4 million.

“By focusing our business on large attractive markets and entering new markets with a partnership-led model, we are convinced that we can capture a fair share of the burgeoning broadcast market and continue to improve our profitability to break even by 2025,” CEO Jeronimo Fulgiera said.

Suffering from comparison with bigger rivals like Spotify (SPOT.N) and Apple Music (AAPL.O), Deezer has yet to recover from its agonizing start on the Euronext Stock Exchange in Paris in July, which saw its shares drop 35% in the first few hours after its listing . Read more

The stock has lost 65% of its value since its first trading day, valuing the company at 472 million euros ($466.38 million), compared to Spotify’s market capitalization of $18.7 billion.

(1 dollar = 1.0120 euro)

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(Reporting by Matthew Rosemin) Editing by Eileen Hardcastle and Emilia Sithole Mataris

Our criteria: Thomson Reuters Trust Principles.

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