Photo by Bastian Riccardi on Unsplash
Spotify Reports Record Profit, Premium Subscriber Growth
July 23, 2024
Audio-streaming giant Spotify reported a record quarterly profit on Tuesday that came in a bit ahead of analyst expectations on a record number of paid subscribers.
According to FactSet, the 246 million paid subscribers in the second quarter were above analyst estimates of 245.3 million, Forbes reported.
Earnings of Sweden-based Spotify rose 45% from a year earlier to 1.11 billion euros ($1.21 billion), per Reuters.
Spotify also reported $532 million in second-quarter free cash flow, a 4,700% year-over-year growth from the second quarter of 2023’s $11 million, blowing past estimates of $363 million.
The news drove the company’s shares up more than 14% Tuesday to hover above $330.
The results follow mass layoffs at the company and cuts to marketing spending. Spotify has a 7,372 full-time global workforce — compared to 9,123 at the end of last year, according to Variety.
Last month, the company announced increases to its Premium subscription prices in the United States, with the following prices:
- Individual: $11.99
- Duo: $16.99
- Family: $19.99
- Student: $5.99
Speaking to Reuters, CEO Daniel Ek said, “We’re moving from one-size-fits-all to having something for everyone,” pointing to Spotify’s various plans for students and shared households.
Spotify reported a 13% increase in its ad-supported revenue in the second quarter, with all regions experiencing double-digit growth. The rise in music advertising revenue was attributed to more impressions sold and higher prices, while the increase in podcast ad revenue came from more impressions sold across original and licensed podcasts and the Spotify Audience Network. However, this was somewhat offset by lower pricing, the company said in its statement to investors.
As of the end of the second quarter, Spotify had 626 million monthly active users in total, a gain of 11 million over the previous quarter but short of its 16 million projection.
“Our business continued to perform well in Q2, led by healthy subscriber gains, improved monetization and record profitability,” Spotify said.
Recent News
Delta Seeks Outage Damages From Microsoft, CrowdStrike
The airline plans to sue both Microsoft and CrowdStrike for damages.
Sprouts Shares Positive Q2 Financial Results
Sprouts Farmers Market, Inc. reported robust second-quarter results ending on June 30, 2024.
Johnnie Walker Maker, Diageo, Posts Largest Sales Drop Since the Pandemic
As inflation and high interest rates force many to find ways to cut spending, it appears alcohol is also losing its buzz.
IKEA Focuses on Sleepeasy With New Pop-Up Event
IKEA U.S. is making new strides in the furniture retail market by launching The IKEA Sleepeasy, an immersive pop-up event that will take place in New York in August.