Spotify Technology SA, the global audio-streaming giant, is making waves after announcing its first-quarter profit, driven by an impressive 14% increase in paid subscribers. Shares surged by 16% to $314.80 in New York, marking the most significant intraday gain since July 2022. This boost reflects Spotify’s successful strategy to diversify beyond music streaming and into new categories of audio entertainment, such as audiobooks.
The Swedish company reported that its paid subscriber base grew to 239 million, matching analysts’ expectations. Additionally, the total number of active users, including those on ad-supported plans, rose to 615 million, slightly below analysts’ forecast of 617.9 million. The surge in paid subscribers demonstrates Spotify’s robust growth, even as it undergoes significant changes to its business model.
Spotify’s revenue increased by 20% to 3.6 billion euros ($3.8 billion), with a net income of 197 million euros. Adjusted operating profit reached a record high of 168 million euros. These figures indicate a solid financial position, allowing Spotify to continue exploring new pricing plans and expanding its service offerings.
Spotify’s shift toward new audio entertainment categories is part of its long-term strategy to maintain growth. The company recently introduced audiobooks into its subscription plans, expanding into six markets. According to Spotify, 25% of users with access to the audiobooks feature have listened to at least one audiobook. This expansion into audiobooks comes amid broader changes within the company, including staff reductions and a renewed focus on podcasting. Spotify also extended its deal with comedian Joe Rogan and began publishing his shows on YouTube and Apple Podcasts.
Looking ahead, Spotify forecasts 631 million active users in the second quarter, including 245 million premium subscribers, slightly below analysts’ forecasts of 637.1 million. The company expects sales of 3.8 billion euros, surpassing the average forecast of 3.76 billion euros. Management anticipates an operating profit of 250 million euros, exceeding analysts’ forecast of 175.3 million euros. These projections suggest that Spotify is poised for continued growth in the coming months.
To learn more about Spotify’s latest financial results and future plans, check out the original report from Bloomberg.