Spotify Technology (NYSE:SPOT) shares soared 15% on Tuesday after the music streaming platform posted record profits during its first quarter, with sales that beat Wall Street expectations.
Earnings per share during the first three months of 2024 came in at a record €0.97, compared to a €1.16 loss a year earlier, a €0.36 loss in the fourth quarter and the €0.65 that analysts had been expecting.
Sales in the quarter marginally beat the Street, rose 20% year-on-year to €3.64 billion, against the €3.61 billion forecast.
Spotify was able to increase its financial metrics despite seeing slightly weaker demand, as monthly active users (MAU) came in at 615 million, lagging guidance of 618 million, though paying subs were in line with guidance at 239 million.
It comes after the music streaming group underwent a strict turnaround plan which resulted in more than a quarter of its workers being sacked.
While it signed a new US$250 million contract with podcaster Joe Rogan earlier this year, it has been scaling back its investment into that segment of the business.
Looking forward to the next quarter, Spotify expects to gain 16 million new monthly active users to take MAU to 631 million, while improving its gross margin through further cost-cutting measures and generating €3.8 billion of revenue.
“Overall, we are encouraged by the strong start to the year and view the business as well positioned to deliver,” the Swedish company said in its earnings presentation.