The Swedish streaming giant that has been investing heavily in AI said its gross profit surpassed €1bn for the first time this year since it was founded in 2006.
Spotify has seen its monthly active users shoot up by 19pc to 615m people in its latest quarterly earnings report published today (23 April) as co-founder and CEO Daniel Ek calls 2024 a “year of monetisation”.
Revenue at the Stockholm-based streaming giant was also up 20pc to €3.6bn while operating income also shot up to €168m. These rise in profits are largely attributed to a substantial increase in paid subscribers of the app, which went up by 14pc to nearly 240m.
“Now as we’ve shifted to focus on strong revenue growth and margin expansion, we see a clear opportunity to ensure we are also continuing to grow the top of our funnel,” said Ek in the earnings report.
“I feel good about the changes we are implementing and remain very confident in our ability to reach the ambitious plans we’ve outlined.”
Spotify said that its gross profit surpassed €1bn for the first time since it was founded in 2006. The company’s gross margin now stands at 27.6pc.
Monthly active users of the popular streaming service has been rising steadily for a while now. In October last year, Spotify’s monthly active users shot up by 26pc as it surprised investors with a better-than-expected performance.
In its previous earnings report in July 2023, Spotify said that it had seen a 27pc surge in monthly active users while subscribers were up 17pc and revenue grew 11pc to €3.2bn.
But not everything well for the company towards the end of the year. In early December, Spotify shared plans to cut roughly 1,500 more staff to become a “productive and efficient” company. The announcement followed Spotify’s decision to cut 6pc of its staff at the start of 2023.
Also in December, its CFO Paul Vogel announced his resignation from the company.
Spotify has also been heavily investing in AI to upgrade its streaming services. Earlier this month, it said it is testing a new AI feature that will allow users to create a playlist based on specific text prompts.
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