Spotify’s Record-Breaking Quarter: 246 Million Subscribers and €3.81 Billion in Revenue

Spotify Technology SA, the Swedish audio-streaming giant, reported strong financial results for the second quarter of 2024. The company exceeded analysts’ expectations in many key areas, showing significant growth in subscribers, revenue, and profitability.

Spotify’s number of paid subscribers grew by 12% from last year, reaching 246 million. This was higher than the 245.2 million subscribers analysts had predicted.

The total number of active users also increased by 14% to 626 million, though this was slightly below the expected 631.5 million. New features, subscription plans, price increases, and the addition of audiobooks helped boost subscriber numbers.

Spotify’s revenue for the quarter was €3.81 billion, a 20% increase from the previous year. The company’s earnings per share (EPS) were €1.33, beating the forecast of €1.05.

The premium revenue was €3.35 billion, just above the estimated €3.34 billion. The company’s gross margin reached 29.2%, higher than the expected 28.1%. Operating income was €266 million, and free cash flow was €490 million, showing strong financial health.

Spotify’s strong performance led to a significant rise in its stock price. Shares increased by as much as 15% before the market opened in New York. The positive earnings report and better-than-expected gross margin were key factors in this surge.

Looking ahead, Spotify predicts 639 million active users and 251 million paid subscribers for the next quarter. The company expects revenue of €4 billion, slightly below analysts’ forecast of €4.365 billion.

Despite this, CEO Daniel Ek remains optimistic, highlighting the company’s innovations and improved business model. New features like personalized playlists and audiobook countdowns are expected to keep users engaged and support future growth.