Spotify earnings soars! Shares surges 14% in Premarket Trade
Spotify’s shares hiked more than 14% in premarket trading after the company reported a record of quarterly profit that was slightly above analyst expectations.
Last year, the Swedish audio streaming major attempted to cut costs by laying off employees and cutting its marketing budget, while simultaneously attempting to expand its user base through promotions and new investments in podcasts. The number of paying Spotify subscribers climbed slightly above expectations to 246 million in the second quarter of 2024.
To 1.11 billion euros ($1.21 billion), profit increased by 45 percent from the previous year, slightly exceeding analysts’ expectations of 1.07 billion euros.
IBES data from LSEG show that earnings per share of 1.33 euros also beat estimates of 1.06 euros. According to the company, user numbers had increased in all regions, but the “continued recalibration” of marketing activities had prevented it from reaching its MAU target.
Speaking to the company’s various plans, CEO Daniel Ek said in an interview with Reuters “It really comes down to the number of subscription offerings we have now. We’re moving from one-size-fits-all to having something for everyone”.
“They did miss their MAU, but within their guidance they are still confident that number will go up, and if they stay on track we’ll all forget about them missing it this quarter.”
It’s definitely something we take very seriously, if we miss our own forecasts,” said Ek. ”For me, it’s a question of when, not if. We will return to strong MAU growth, I feel good about it.”
