Spotify's quarterly profit exceeds €1B for first time, shares surge
Spotify, the globally popular music streaming platform, experienced a significant surge in its shares by up to 16% on Tuesday. This increase came after the company announced a considerable rise in paid subscribers and a quarterly gross profit surpassing €1 billion ($1.1 billion) for the first time. Spotify's shares closed at $303.31 on the New York Stock Exchange (NYSE), following an increase of 11.41%.
Spotify's first quarter marked a significant financial turnaround
Spotify's first quarter marked a significant financial turnaround with an operating profit of €168 million. This is a notable improvement from the loss of €156 million reported during the same period last year. However, this figure fell slightly short of its projected €180 million. The company attributed this shortfall to higher-than-expected payroll taxes related to share-based compensations.
Spotify's Q1 revenue rose by 20%
Spotify's revenue for the first quarter rose by 20% year-on-year to reach €3.6 billion, despite a slight dip of 1% from the previous quarter. By the end of Q1, the company boasted 615 million active users, slightly below its projected 618 million. Among them, 239 million were subscribed users. In the earnings report, Spotify expressed satisfaction with its performance in the quarter, citing strong subscriber growth, enhanced monetization, and record profitability levels.
Spotify aims to reach 631 million active users
Spotify's CEO, Daniel Ek, revealed plans to increase marketing expenditure throughout the year in an effort to sustain growth. He acknowledged that the company might have been overly cautious in some markets. Looking ahead to Q2, Spotify anticipates an operating profit of €250 million and aims to reach 631 million active users, including 245 million premium subscribers. Despite its market dominance, the company has yet to post a full-year net profit and only sporadically reports quarterly profits.
