- Spotify posted a surprise profit and beat revenue estimates as it raised prices and cut expenses.
- The streaming music service also added more monthly active users and subscribers. Premium subscribers than expected.
- Spotify said it expects the business to continue to be profitable.
Shares of Spotify Technologies (SPOT) climbed by more than 9% on Tuesday as the music streaming service posted its first profit in a year and a half thanks to higher prices and cost cuts.
The Sweden-based technology company has announced profit for the third quarter of fiscal 2023 of 65 million euros ($68.84 million) or 33 euro cents ($0.35) per share. Analysts had expected a loss. Revenue jumped 10.6% from last year to 3.36 billion euros ($3.56 billion), also better than expected.
The total number of monthly active users (MAU) rose 23 million from the second quarter to 574 million, 2 million more than the company expected. The number of premium subscribers increased by 6 million to 226 million, higher than forecasts.
The company credited the good results to “lower than expected personnel costs, associated costs and marketing expenses.” Spotify added that it was “pleased with our performance”, and said it considered the company to be well positioned to achieve its goals. Chief financial officer Paul Vogel said it was an “inflection point” for Spotify, which hopes to continue to be profitable.
The news sent shares Spotify at their highest level since July, and their value has more than doubled since the start of the year.
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