💥Q1 Growth for Spotify: Profit, Expanding Offerings, and Rising Shares

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Spotify shares experienced a significant boost in Tuesday trading following the positive news that the Swedish streaming company turned a profit in the first quarter of the year.

This achievement was attributed to the expansion of video offerings, the increasing popularity of audiobooks, and the implementation of AI-generated playlists. Despite a slight slowdown in subscriber and user growth, Spotify managed to capitalise on these factors and achieve profitability. The company has announced its plans to introduce new options, such as an audiobook-only tier and a music-only tier, in order to attract a wider range of consumers and grow its user base.

Here’s a quick look at the results:

• Monthly Active Users grew 19% Y/Y to 615 million.

• Subscribers increased 14% Y/Y to 239 million.

• Total Revenue was up 20% Y/Y to €3.6 billion.

• Gross Margin reached 27.6%.

• Operating Income improved to €168 million.

The company's revenue results exceeded the expectations of Wall Street, as did its revenue forecast for the current quarter. This positive news caused its US-listed shares to rise by $34.20, or 12.6%, to $306.44 during morning trading. Spotify Technology SA ended Monday at $272.24, showing a 44% increase since the beginning of the year.

“We’ve talked about 2024 as the year of monetization and we’re delivering on that ambition,” said Spotify co-founder and CEO Daniel Ek. “Now as we’ve shifted to focus on strong revenue growth and margin expansion, we see a clear opportunity to ensure we are also continuing to grow the top of our funnel. I feel good about the changes we are implementing and remain very confident in our ability to reach the ambitious plans we’ve outlined.”

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