France’s Deezer pledges to turn a profit by 2025

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

PARIS, Sept 21 (Reuters) – French music streaming platform Deezer’s ( DEEZR.PA ) first-half adjusted gross profit rose 9.1% from a year earlier, led by rising sales in its home country that solidified its goal of turning a profit by 2025, the company said. said Wednesday.

The group, once championed in France as one of the first and most promising so-called unicorns, companies valued at 1 billion euros or more, is trying to convince investors of its ability to turn a profit by 2025 by focusing on key markets such as France, Brazil and the Netherlands and new services.

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

This was mainly due to an increase in average revenue per user (ARPU), which increased by 12.4% to 3.9 euros. Deezer’s direct customer base in France, where it generates about 60% of its consolidated revenue, rose to 3.3 million from 3 million a year ago.

Yet total subscriber numbers fell by around 3% to 9.4 million.

“By focusing our business on large attractive markets and entering new markets with a partnership-led model, we are confident that we can capture a fair share of the growing streaming market and continue to improve our profitability to reach breakeven by 2025, Chief Executive Officer Dr. Geronimo Falgueira.

Suffering from bigger rivals like Spotify ( SPOT.N ) and Apple Music ( AAPL.O ), Deezer has yet to recover from its painful debut on Euronext’s Paris stock exchange in July, which saw its shares plunge 35% in the first few hours after 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 = 1.0120 euros)

Reporting by Matthew Rosemain; Editing by Elaine Hardcastle and Emelia Sithole-Mataris

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