Spotify missed its monthly active user goals for the first quarter of 2024 by a few million.
The platform now believes it has 615 million monthly users as of the beginning of the year, with 239 million premium subscribers.
Despite record gross profits of over €1 billion, investors sent shares slightly down following the news.
To meet the lofty goals of co-founder and CEO Daniel Ek, Spotify has six more years to hit one billion users and according to its latest results, the platform now has 615 million monthly active users as of the first quarter of 2024.
The latest gains, compared to 602 million recorded at the end of 2023, were disappointing to investors as they missed the company’s own estimates of 618 million monthly users. It also forecasts its second-quarter users at 631 million, below the estimates of analysts.
However, the number of its premium subscribers, from which the firm makes most of its money, was up 14 percent to 239 million, in line with estimates, according to a Reuters report.
Spotify, now in its 18th year of operation, celebrating its latest results with a post on X.
Just released — $SPOT Q1 2024 earnings and shareholder presentation. Read more: https://t.co/7vMbY872JL pic.twitter.com/2hcMWuLjKY— Spotify News (@SpotifyNews) April 23, 2024The firm now records an operating income of €168 million for the quarter, with gross profits surpassing €1 billion for the first time in its history. Ek called it “record profitability” and said “We are now consistently profitable which is great news.”
Unfortunately, investors were not too pleased with the results, and Spotify shares were down 1.6 percent in premarket trading on Tuesday. At press time they were down 1.30 percent.
Despite Ek’s assertions of “an amazing quarter” to begin 2024, the company had to enact sweeping layoffs last year to boost its efforts towards its financial goals. It is estimated that it cut 17 percent of staffers, or around 1 500 employees.
“Considering the gap between our financial goal state and our current operational costs, I decided that a substantial action to rightsize our costs was the best option to accomplish our objectives. While I am convinced this is the right action for our company, I also understand it will be incredibly painful for our team,” Ek said at the time.
Spotify now expects revenues for the second quarter of 2024 to reach €3.8 billion, against the €3.6 billion it recorded in its first quarter results.
[Image – Photo by Agê Barros on Unsplash]
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