(Stockholm) Swedish music streaming giant Spotify beat its forecasts with a sharp improvement in operating profit to 266 million euros (C$398 million) in the second quarter and 7 million new paying subscribers in the quarter, it said Tuesday.
Spotify is growing “at a pace that exceeds even our own expectations. This bodes very well for the future,” CEO Daniel Ek said in a statement.
Spotify now has 246 million paying subscribers, a million more than expected, and a total of 626 million active users of its platform, a figure that is however below its forecast of 631 million.
The Swedish group, which posted an operating loss a year ago, returned to operating profit in the first quarter (156 million euros) and therefore further increased its profits in the second quarter.
“Our business continued to perform well in the second quarter, driven by significant subscriber gains, improved monetization and record profitability,” the group noted in its quarterly report.
Spotify notably raised its subscription prices in June, for the second time in a year. Its improved profit was also explained by lower marketing and personnel expenses, it said.
The platform, listed on the New York Stock Exchange, has continued to invest since its launch in 2006, first to fuel its growth by establishing itself in new markets and then by offering exclusive content, such as podcasts, in which it has invested more than a billion dollars.
Since its inception 18 years ago, the platform has never posted a net profit for an entire year and only occasionally made quarterly profits, despite its success in the online music market.
To reduce its costs, it announced at the beginning of December 2023 a third wave of reductions in its workforce, by 17%, or around 1,500 people.