STOCKHOLM (AFP) – Music and podcast streaming giant Spotify reported yesterday an increase in the number of paying subscribers and a rare but lower-than-expected operating profit for the first quarter.
The company posted a “new quarterly high” operating profit of EUR168 million (USD179 million) – a turnaround from a loss of EUR156 million over the same period last year.
But the figure was lower than its guidance of EUR180 million.
Spotify said the operating profit had been impacted by higher-than-expected payroll taxes which are tied to share-based compensations.
The audio group said it had 615 million active users at the end of the quarter, just short of its guidance of 618 million.
However, of those 239 million were paying subscribers, just in line with its projections.
Spotify said the business had “performed well” in the quarter, “led by healthy subscriber gains, improved monetisation and record strength in profitability”.
“Overall, we are encouraged by the strong start to the year,” the company said in its earnings report.
Revenue grew 20 per cent year-on-year to EUR3.6 billion, but was down one per cent compared to the preceding quarter.
Spotify has invested heavily since its launch to fuel growth with expansions into new markets and, in later years, exclusive content such as podcasts.
Despite its success in the online music market, the company has never posted a full-year net profit and only occasionally quarterly profits.
Yesterday, it said it expected an operating profit of EUR250 million in the second quarter of the year.
