Spotify Reports First Profit Since 2021, Supported By Increased Prices And Customer Growth

Spotify is starting to make a profit. (photo: dock. pexels)

Spotify, on Tuesday, October 24, reported its first quarterly profit since 2021. This profit was driven by price increases in its streaming services and customer growth across the region. They also project that the number of monthly listeners will reach 601 million in this quarter.

The company recorded a third-quarter operating profit of 32 million euros (Rp538 billion), its first quarterly profit since 2021, with the help of higher gross margins and lower marketing costs and personnel.

"We believe that going forward, we should see a fairly consistent growth in our operating profit," Spotify Chief Financial Officer Paul Vogel said. This company projects an operating profit of 37 million euros (Rp 622 billion) this quarter.

After spending more than a billion euros in the development of its podcast business, Spotify has been keeping spending tight, cutting about 6% of employees earlier this year and in July priced up its premium package.

"We are still focused on efficiency, but efficiency for us not only means cutting costs, but also covers how to get more than every dollar," Spotify CEO Daniel Ek was quoted as saying by VOI from Reuters.

Marjin gross Spotify rose to 26.4% in the period July to September, up 166 basis points from the previous year. "We expect to continue to see margin expansion into next year," Vogel said in an interview.

The company's monthly number of active users rose 26% to 574 million in the third quarter, surpassing internal guidance and analyst forecasts of 565.7 million.

Premium subscribers, which accounted for most of the company's revenue, rose 16% to 226 million, surpassing estimates of 223.7 million, according to IBES data from LSEG. Income rose 11% to 3.36 billion euros, beating estimates of 3.33 billion.

Spotify's monthly user projection for the fourth quarter set the company on a target of reaching 1 billion users and revenue of 100 billion US dollars per year by 2030. Previous analysts estimated a projection of 591.2 million listeners.

Spotify also expects premium subscribers to reach 235 million in the last three months of this year and revenues to reach 3.7 billion euros. Analysts expect a projection of 232.4 million premium subscribers and revenues of 3.69 billion euros.