Spotify Reports Strong Growth in Subscribers and Record Profits
Spotify, the world-leading music streaming platform, has announced a 12% increase in paying subscribers for the first quarter, reaching a total of 268 million. Alongside this growth, the company also reported a record operating profit.
Daniel Ek, Spotify’s CEO, highlighted the company’s strong performance, noting, “The underlying data is very healthy: engagement remains high, retention is strong, and our freemium model offers flexibility, allowing users to stay with us even in uncertain times.”
At the end of March, Spotify had 678 million active users, a 10% increase year-over-year, which met the company’s growth expectations.
The surge in paying subscribers, who make up the majority of Spotify’s revenue, exceeded the company’s forecast, which was set at 265 million. This growth contributed significantly to the company’s operating profit, which soared by 203% to reach 509 million euros ($580 million). However, this result fell short of the expected 548 million euros.
Spotify explained that while gross profit strength and lower personnel and marketing costs boosted earnings, they were offset by 76 million euros in social charges. Additionally, sales rose by 15% to 4.19 billion euros.
In line with its ongoing strategy to increase revenue, Spotify is planning to raise subscription prices in several European and Latin American countries this summer, according to the Financial Times.
The company also achieved a significant milestone in 2024, logging its first-ever annual profit of 1.1 billion euros. This success came after efforts to control costs and a series of fee hikes for paying subscribers in markets like the United States.
Spotify’s share price has been on the rise, reflecting investor confidence, with an impressive 34% increase so far this year.
