Spotify Reports First-Ever Profit

Spotify Technology reported its first-ever profit in the latest quarter, thanks to its investment in Chinese music-streaming service Tencent Music Entertainment Group, but it lowered its subscriber-growth guidance for the current quarter.

According to The Wall Street Journal, the company, which expects to return to a loss this quarter, reported 87 million subscribers after adding a net four million during the quarter ended Sept. 30. That helped bring Spotify’s total monthly active user count—which includes listeners of its free, ad-supported version—to 191 million. Results were on the high end of the company’s guidance.

Spotify tempered the high end of its subscriber-growth outlook for the December quarter, forecasting its subscriber count to hit 93 million to 96 million and active users to reach 199 million to 206 million. It had previously guided for up to 97 million subscribers and up to 207 million active users.

On a conference call with investors, Spotify executives said that and other partnerships, including the service’s integration with Samsung smartphones announced during the quarter, represent “significant opportunity for growth” but said it is too early to report progress.

Chief Executive Daniel Ek said one of the company’s key strategies is to work with as many partners as possible. “Spotify’s goal is to be a top-notch user experience on all of those devices,” he said.

During the quarter, the company rolled out updates to its Spotify for Artists analytics platform. One feature, in beta in the U.S., allows some independent artists to upload their music directly to the service. A playlist submission feature also allows artists and labels to submit unreleased music to Spotify’s editorial team for consideration to be included on playlists that can direct many more listeners to an artist’s songs.

“We don’t view our strategy to be in opposition to any of our partners,” said Mr. Ek. “It’s quite substantial to bring new artist to the masses. If we can bring the cost down for that we should see a lot more artists and labels being successful.”