In premarket trading, Spotify shares increased by more than 14% after the company reported a record quarterly profit on Tuesday, slightly above analyst estimates.
Last year, the Swedish audio-streaming behemoth attempted to increase its user base through promotions and new investments in podcasts while simultaneously attempting to decrease expenses through layoffs and reductions to its marketing budget.
The profit increased consistently to 1.11 billion euros, which was marginally higher than the 1.07 billion euros predicted by analysts. With 1.33 euros in earnings per share, LSEG surpassed estimates of 1.06 euros, according to IBES data.
In the second quarter of 2024, revenue increased to 3.81 billion euros ($4.14 billion), just shy of the 3.82 billion euros predicted by analysts. In terms of monthly active users (MAUs), the business did not meet its own goal. Spotify has stated its goal of 631 million MAUs in the past. However, with 626 million MAUs during the quarter, the corporation was unable to meet this aim.
While the company did report an increase in users worldwide, it blamed “continued recalibration” of marketing efforts for its failure to reach its MAU target.
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If we fail to meet our own projections, it is certainly something that CEO Daniel Ek takes very seriously, as he stated in an interview. The question is when, not if, in my opinion. Strong MAU growth will resume; I’m confident of it.
A year-over-year increase brought Spotify’s gross profit margin up to 29.2% from 27.6%.
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