LONDON, July 23 (Reuters) - Spotify posted a record quarterly profit slightly ahead of analyst expectations on Tuesday, pushing its shares up more than 14% in premarket trading.
The Swedish audio-streaming giant sought to reduce costs through layoffs and cuts to its marketing budget last year, while trying to grow its user base through promotions and new investments in podcasts.
Profit grew steadily to 1.11 billion euros, slightly above analysts' expectations for 1.07 billion euros. Earnings per share of 1.33 euros also beat estimates of 1.06 euros, according to IBES data from LSEG.
Revenue rose to 3.81 billion euros ($4.14 billion) for the second quarter of 2024, fractionally below analysts' estimates of 3.82 billion euros. The company did fall short of its own target for monthly active users (MAUs). Spotify previously said it aimed to reach 631 million monthly active users (MAUs). The company fell short of this target, however, attracting 626 million MAUs for the quarter.
The company said it had seen user numbers grow across all regions, but that it had not met its MAU goal due to "continued recalibration" of marketing activities.
"It's definitely something we take very seriously, if we miss our own forecasts," CEO Daniel Ek said in an interview. "For me, it's a question of when, not if. We will return to strong MAU growth, I feel good about it."
Spotify's gross profit margin widened to 29.2% from 27.6% in the previous quarter.
($1 = 0.9200 euros)
Reporting by Martin Coulter, Editing by Louise Heavens, Kirsten Donovan
Source: Reuters