Source: AFP
Music and podcast streaming giant Spotify on Tuesday reported growth in paying subscribers and a rare but lower-than-expected operating profit for the first quarter.
The company posted a “new quarterly high” operating profit of 168 million euros ($179 million) — a rebound from a loss of 156 million euros in the same period last year.
But the figure was lower than guidance of 180 million euros.
Spotify said operating profit had been impacted by higher-than-expected payroll taxes tied to stock-based compensation.
The audio group said it had 615 million active users at the end of the quarter, slightly below its guidance of 618 million.
However, of those 239 million were paying subscribers, just in line with her predictions.
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Spotify said the business performed “well” in the quarter, “led by healthy subscriber gains, improved monetization and record strength in profitability.”
“Overall, we are encouraged by the strong start to the year,” the company said in its earnings report.
Revenue rose 20% year-on-year to €3.6bn, but fell 1% compared to the previous quarter.
Spotify has invested heavily since its launch to fuel growth with expansions into new markets and, in the coming years, exclusive content such as podcasts.
Despite its success in the online music market, the company has never posted a full-year net profit and only the occasional quarterly profit.
On Tuesday it said it expects operating profit of 250 million euros in the second quarter of the year.
In December, Spotify announced it would cut its staff by around 17% in an effort to cut costs, which followed earlier cuts announced in January and June 2023.
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In July 2023, the Swedish company, which is listed on the New York Stock Exchange, announced that it had increased its prices for premium subscribers “in a number of markets around the world”, following in the footsteps of similar moves by rival music services from Apple and Amazon.
Source: AFP