By Anne Steele
Spotify stock surged after the audio-streaming company swung to a first-quarter profit.
Shares jumped over 14% to trade at around $312.90, putting the stock on track for its highest close since March 2021.
Spotify is turning 18 this quarter and topping it off with showing we’re a consistently profitable company, Chief Executive Daniel Ek said in an interview.
After years of rapid subscriber growth and efforts to expand beyond music streaming into broader audio offerings including podcasts and audiobooks, the company has been focused on controlling costs and prioritizing profitability.
Spotify reported a quarterly profit of 197 million euros, or 97 euro cents a share, versus a prior-year loss of 225 million. Analysts had expected 62 euro cents a share, according to FactSet.
Monthly active users grew 19% to 615 million, 3 million shy of Spotifys guidance, amid moderated marketing activity.
Some other key highlights from Spotifys earnings:
— Premium subscribersthe companys most lucrative type of customerrose 14% to 239 million, in line with guidance.
— Average revenue per user for the subscription business climbed 5% to 4.55, helped by recent price increases. The metric has been pressured as Spotify brings in new subscribers via discounted plans and lower prices in emerging markets.
— Ad-supported revenue ticked up 18% to 389 million, the equivalent of around $414 million. Podcast ad revenue is growing faster than music.
— Overall revenue increased 20% to 3.64 billion, in line with guidance.
The company raised prices in five markets this month, and plans to raise prices in the U.S. this year, in moves that help fund its audiobook initiative.
Ek said audiobooks have contributed over 2.5 hours in increased listening per user in the first 14 days of subscribers starting a book.
We’re adding a lot of value here to consumers membership on Spotify, Ek said. And now were thinking about the value-to-price ratio.