Spotify has projected a first-quarter operating profit of €548 million ($566.19 million), surpassing market estimates of €450.6 million, driven by steady user growth, price hikes, and cost-cutting measures. Following the announcement, Spotify’s shares surged over 9% in premarket trading.
The Swedish audio-streaming giant has maintained tight control over costs, including marketing expenses, while increasing subscription prices in mid-2023. At the same time, its focus on music and podcast video content has attracted more users, analysts note.
The company expects monthly active users (MAUs) to reach 678 million in Q1, aligning with estimates of 679.4 million. Spotify also forecasts 2 million new premium subscribers, bringing the total to 265 million, exceeding Visible Alpha’s 263.2 million projection.
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In Q4, premium subscribers grew by 11% to 263 million, while MAUs increased by 12% to 675 million, surpassing expectations. Revenue for the quarter rose 16% to €4.24 billion, beating estimates of €4.19 billion, with gross profit jumping 40% to €1.37 billion.
Looking ahead, Spotify anticipates Q1 revenue of €4.2 billion, slightly above market expectations of €4.17 billion, as it continues to capitalize on its subscription model, strategic price increases, and user engagement initiatives.
