Swedish company Spotify Technology, known for its popular audio streaming service, reported subscriber growth in the second quarter of 2024 that exceeded analysts’ forecasts. Despite increasing rates for its paid plans, the company saw a notable rise in its user base, as highlighted by Bloomberg.
Subscriber Growth and Financial Performance
Spotify’s paid subscribers grew 12% year over year to 246 million, surpassing Wall Street analysts’ forecast of 245.2 million subscribers. Following this announcement, Spotify shares jumped by 15%. This growth is particularly impressive given the company’s decision to raise prices for its paid plans and introduce new subscription tiers.
In an effort to improve profitability, Spotify has significantly cut costs over the past year by reducing staff and eliminating podcast production. The company has also changed its approach to content and pricing, offering premium subscribers free access to audiobooks for 15 hours per month since the end of 2023.
Spotify’s revenue in the second quarter rose to €3.81 billion, aligning with analysts’ expectations. Earnings amounted to €1.33 per share, compared to the forecast of €1.04 per share. The total number of active users grew by 14% during the quarter, reaching 626 million.
Future Projections and Updates
Looking ahead, Spotify projects the number of active users in the current quarter to be 639 million, slightly below analysts’ forecast of 650.45 million. For paid subscribers, the company forecasts 251 million, which coincides with expert estimates, adds NIXSOLUTIONS.
Spotify CEO Daniel Ek expressed optimism about the company’s performance, stating in a video posted on social media platform X that it “was a really great quarter.” He highlighted several updates that helped make the platform “more interesting,” including the introduction of countdown pages for upcoming audiobook releases and Daylist, an algorithm-driven, ever-changing personalized playlist.
Commitment to Updates
We’ll keep you updated on Spotify’s continued growth and innovation. The company’s strategic changes and user-centric updates suggest a positive trajectory, promising further developments in the audio streaming industry.