Spotify Swings To Profit Amid Boost in Paid Subscribers
Spotify Technology SA, the audio-streaming giant, reported first-quarter results broadly in line with analyst forecasts as the company continued to add new features.
(Bloomberg) -- Spotify Technology SA, the audio-streaming giant, swung to profit in the first quarter, as the company boosted subscribers and added new features. The shares jumped more than 8% in premarket trading.
Paid subscribers rose 14% year over year to 239 million, the company said Tuesday in a statement, in line with analysts’ estimates compiled by Bloomberg. Total active users, including those plans with advertising, grew to 615 million, compared with the 617.9 million forecast by analysts.
The Sweden-based company raised prices last year and is again planning to charge more for its service. It is also designing new plans, such as one that will omit audiobooks for a lower monthly price. Total revenue grew 20% to €3.6 billion ($3.8 billion), also in line with expectations. The company’s adjusted operating profit was €168 million, compared to a loss a year ago and beating analysts’ estimates.
Spotify introduced audiobooks to subscription plans last year and has since expanded into six markets. The company said 25% of users with access to the offering had pressed play at least once.
The company cut back on its podcast staff and programming, though it renewed its distribution deal with comedian Joe Rogan in February and began publishing his show more broadly on YouTube and Apple Podcasts.
Spotify forecasts 631 million active users for the second quarter, including 245 million premium subscribers, missing analysts’ projections of 637.1 million. Management anticipates sales of €3.8 billion, compared with the €3.76 billion average estimate. The company forecasts €250 million in operating income, above analysts’ estimates of €175.3 million.
(Updates with shares)
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