Spotify came up short on user growth, but swung to a profit in the first quarter, delivering a mixed earnings report as it works to achieve consistent profitability this year.
The Wall Street Journal reports the company's stock rallied over 8% in premarket trading after the results were out, having fallen 1.3% on Monday.
After years of rapid subscriber growth and efforts to expand beyond music streaming into broader audio offerings including podcasts and audiobooks, the company has been focused on controlling costs and prioritizing profitability.
Spotify reported a €197 million profit, or 97 euro cents a share, from a prior-year loss of €225 million, or €1.16 a share. Analysts had expected 62 euro cents a share, according to FactSet.
Monthly active users grew 19% to 615 million, 3 million shy of Spotify’s guidance, amid moderated marketing activity.
Some other key highlights from Spotify’s earnings:
- Premium subscribers—the company’s most lucrative type of customer—rose 14% to 239 million, in line with guidance.
- Average revenue per user for the subscription business climbed 5% to €4.55, helped by recent price increases. The metric has been pressured as Spotify brings in new subscribers via discounted plans and lower prices in emerging markets.
- Ad-supported revenue ticked up 18% to €389 million, the equivalent of around $414 million, with podcast ad revenue growing faster than music.
- Overall revenue increased 20% to €3.64 billion, in line with guidance.
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