Spotify shares jumped 10% today after the company reported a surprise profit for the third quarter — its first quarterly profit in a year and a half — as price increases and cost-cutting measures took hold.
The company’s stock has more than doubled so far this year, up roughly 112% for 2023, according to CNBC.
The Swedish music streaming giant posted a profit of 65 million euros ($68.9 million), driven by “lower marketing spend and lower personnel costs and related costs.” Earlier this year, Spotify laid off 200 people, or 2% of its workforce, as part of a strategic change in its podcasting unit.
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| Daniel Ek |
- Earnings per share: 33 euro cents vs. a loss of 22 euro cents
- Revenue: 3.36 billion euros vs. 3.33 billion euros
- Premium subscribers: 226 million vs. 224 million
Spotify raised the prices of its subscription plans earlier this year, increasing the monthly bill for users anywhere from $1 to $2, depending on the plan. In its third-quarter earnings report, Spotify said “the early effects of price increases” were partially responsible for the 11% year-over-year revenue growth.
The company had 574 million monthly active users in the quarter, compared with 572.1 million estimated, according to StreetAccount. Monthly active users drove 447 million euros of ad-supported revenue, the company reported, an increase of 16% year over year.
Spotify announced earlier this month that it will offer subscribers access to more than 150,000 audio books. The service has already launched in the U.K. and Australia and will debut in the U.S. later this year.
Its Spotify’s latest foray into another audio format outside of music after the company branched out into podcasts in 2015.
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