Spotify, the global leader in audio streaming, experienced a significant boost in its stock price following the announcement of its first-quarter profit and a surge in paid subscribers. On Tuesday, the Swedish company revealed a 14% increase in paid subscribers, bringing the total to 239 million, in line with analysts’ expectations compiled by Bloomberg. The total number of active users, including those on free plans with ads, rose to 615 million, slightly below the forecast of 617.9 million.
Spotify’s shares jumped 16% to $314.80 in New York, marking the biggest intraday gain since July 2022.This notable rise underscores investor confidence in Spotify’s evolving business model and its capacity to adapt in the competitive audio entertainment industry.
Spotify has been diversifying its offerings, expanding beyond music streaming to include other audio entertainment categories like audiobooks. After years of rapid subscriber growth, the company implemented its first price increase in over a decade last year, with another hike planned by the end of this month. In an effort to maintain flexibility and attract a broader audience, Spotify is developing multiple pricing tiers, including a lower-cost plan without audiobooks and a music-only plan.
Total revenue increased by 20% to 3.6 billion euros ($3.8 billion), with a net income of 197 million euros. Adjusted operating profit reached 168 million euros, a record high. This financial performance aligns with Spotify’s strategy to focus on profitability and sustainable growth.
Spotify’s audiobook inclusion has gained traction, with the company entering six markets. According to Spotify, 25% of users with access to audiobooks have played at least one book. Despite recent cuts to staff and podcast programs, Spotify renewed its deal with comedian Joe Rogan and extended his shows’ distribution to platforms like YouTube and Apple Podcasts.
Looking ahead, Spotify anticipates 631 million active users in the second quarter, including 245 million premium subscribers, which is slightly below analysts’ expectations. However, the company forecasts operating profits of 250 million euros, exceeding the forecast of 175.3 million euros.
For more information, read the original report on Bloomberg https://www.bloomberg.com/news/articles/2024-04-23/spotify-boosts-paid-subscribers-in-first-quarter-beating-estimates
