Swedish company Spotify Technology, known for its audio streaming service of the same name, reported subscriber growth in the second quarter of 2024, which exceeded analysts’ forecasts. This is despite the fact that the company has increased rates for its paid plans, Bloomberg writes.
Image source: deepanker70/Pixabay
The service’s paid subscribers grew 12% year over year to 246 million, the company announced Tuesday, beating Wall Street analysts’ forecast of 245.2 million subscribers. Following this news, Spotify shares jumped 15%.
In an effort to improve profitability, Spotify has significantly cut costs over the past year by cutting staff and eliminating podcast production. The company has also changed its approach to content and pricing, raising prices and planning to introduce new subscription tiers, as well as providing premium subscribers with free access to audiobooks for 15 hours per month at the end of 2023.
The company believes that in the current quarter the number of active users will be 639 million, which is lower than analysts’ forecast of 650.45 million. For paid subscribers, the company’s forecast is 251 million, which coincides with expert estimates.
Spotify CEO Daniel Ek said in a video posted on social media X that it “was a really great quarter,” noting that the updates helped the platform become “more interesting.” Among the updates, Daniel Ek cited the introduction of countdown pages that allow users to bookmark upcoming audiobook releases, as well as the introduction of Daylist, an algorithm-driven, ever-changing personalized playlist.
Spotify’s revenue in the second quarter rose to €3.81 billion, in line with analysts’ expectations. Earnings amounted to €1.33 per share compared to analysts’ forecast of €1.04 per share. The total number of active users of the streaming service grew during the quarter by 14% to 626 million people.