July 23, London (Reuters) – The shares of Spotify (SPOT.N), opens new tab, surged more than 14% in premarket trading on Tuesday after the company reported a record quarterly profit just under analyst expectations.
Last year, the massive Swedish audio-streaming company tried to cut expenses by implementing layoffs and reducing its marketing budget while attempting to increase its user base through new podcast investments and promotions. Slightly above forecast, the number of paying Spotify users increased to 246 million in the second quarter of 2024.
It all boils down to how many subscription options we currently have. In an interview with Reuters, CEO Daniel Ek mentioned the company’s different plans for shared households and students. “We’re moving from one-size-fits-all to having something for everyone,” Ek said.
Profit increased to 1.11 billion euros ($1.21 billion) from the previous year, 45% more than analysts had predicted (1.07 billion euros). IBES data from LSEG shows that earnings per share of 1.33 euros exceeded estimates of 1.06 euros.
For the second quarter of 2024, revenue increased by 20% to 3.81 billion euros, slightly less than analysts’ projections of 3.82 billion euros. The business did not meet its monthly active user (MAU) goal. Before the quarter, Spotify stated that it wanted to reach 631 million monthly active users (MAUs), but it only managed to reach 626 million.
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