Spotify Technology SA, the leading audio-streaming platform, experienced a significant surge in its stock price after the company reported its first-quarter earnings. The Swedish company announced that its paid subscriber base grew by 14% to 239 million, meeting analysts’ expectations, and this growth in subscribers has driven Spotify’s shares up by 16% to $314.80, marking the largest intraday gain since July 2022.
Total active users, which include those on free ad-supported plans, reached 615 million, slightly under analysts’ expectations of 617.9 million. However, the strong increase in paid subscribers, along with new features and expansions into other audio categories like audiobooks, contributed to Spotify’s record-breaking financial performance in the first quarter of 2024.
Spotify is evolving its business model, aiming to offer more than just music streaming. The company has begun diversifying into other audio entertainment sectors, notably audiobooks, following its first price hike in over a decade. Spotify is experimenting with new pricing plans, including lower-cost options that exclude audiobooks and a music-only tier. This strategic shift is designed to appeal to a broader audience and maintain its competitive edge.
The company’s revenue increased by 20% to 3.6 billion euros ($3.8 billion) with a net income of 197 million euros, reflecting a strong financial foundation. Adjusted operating profit reached a record 168 million euros. Despite cuts to staff and podcast programs, Spotify renewed its deal with comedian Joe Rogan in February, indicating its commitment to strengthening its podcast content.
In the second quarter, Spotify forecasts 631 million active users, with 245 million premium subscribers, slightly below analysts’ estimates. Sales are expected to reach 3.8 billion euros, aligning with forecasts, while operating profit is projected at 250 million euros, significantly above analysts’ predictions.
Spotify’s continuous innovation and expansion into diverse audio formats are seen as key drivers for future growth. To learn more about
Spotify’s first-quarter results and future outlook, read the full report on Bloomberg.