Music streaming fig Spotify is still growing and reporting record results. Gross margin rose to 27.6 percent in the first quarter of this year, compared to 25.2 percent a year earlier. The company’s quarterly revenue rose 20 percent to 3.64 billion euros, beating estimates of 3.61 billion euros. And the gross profit exceeded one billion euros, i.e. over 25 billion crowns.
Spotify currently has 615 million users, which is slightly less than the company itself projected, which reported 618 million users for the quarter. It wants to have 631 million by the middle of the year.
Crucial, however, is the number of premium service subscribers, which rose 14 percent to 239 million in the first quarter, in line with estimates.
Shares in Spotify, which initially fell after reporting first-quarter results, reversed course and rose eight percent in premarket trading on Tuesday.
A large part of Spotify’s profit came from its podcast business. Created podcasts appeared on the platform Michelle and Barack The Obamasas well as the Duke and Duchess of Sussex.
However, Spotify CEO Daniel Ek said during the presentation of the results that the company is preparing a special tariff for users who do not enjoy podcasts.
Since its launch in 2006, Spotify has invested huge amounts of money in growing the business and securing exclusive content. It also plans to have a billion users by 2030, it can attract its listeners in different ways.
Spotify uses artificial intelligence to create personalized playlists like Discover Weekly and Daily Mix. The flagship of personalized listening should be DJ “X” controlled by artificial intelligence. Even as Spotify’s algorithms are criticized, the company remains the biggest player in music streaming.
However, the company also missed out on the nice results that investors appreciated. Last December, Ek said that as part of “fundamental measures to rationalize our costs”, the company would cut around 1,500 jobs. In the end, nearly 1,600 people lost their jobs, 17 percent of Spotify’s workforce left, and the headcount stood at 7,721 today.
