Spotify shares (ticker: SPOT) are spiking in premarket trading as of the time of this writing. The stock price jump comes after Spotify reported Q1 2024 results, with the company boasting that it achieved record profitability in the quarter. Currently, Spotify shares are trading up nearly 6.5% to just above $290 per share.
For its Q1 2024, Spotify said it had “a solid start to the year,” which saw many key metrics boast of double-digit growth. Those metrics include:
- 615 million monthly active users (up 19% year over year)
- 239 million subscribers (up 14% YOY)
- €3.6 billion ($3.83 billion) in total revenue (up 20% YOY)
Announcing the results, Spotify cofounder and CEO Daniel Ek said, “We’ve talked about 2024 as the year of monetization and we’re delivering on that ambition. Now as we’ve shifted to focus on strong revenue growth and margin expansion, we see a clear opportunity to ensure we are also continuing to grow the top of our funnel. I feel good about the changes we are implementing and remain very confident in our ability to reach the ambitious plans we’ve outlined.”
But the company didn’t achieve a perfect string of hits in Q124. While total monthly active users (MAUs) were up 19% YOY to 615 million, that number came in below what Spotify had originally forecast, which was a MAU count of 618 million—a shortfall of 3 million.
From an investor standpoint, however, there was much to celebrate: Gross profit surpassed €1 billion ($1.06 billion) for the first time in the company’s history. Spotify also said its gross margin was 27.6% for the quarter, up 243 basis points year-over-year, partially due to improved music and podcast profitability.
What Spotify did not focus on in its earnings report was the numerous rounds of layoffs the company underwent in 2023. However, the company reported that as of the end of Q1 2024, it now had 7,721 full-time employees globally.
Going forward, Spotify forecasts that in its second quarter of 2024, it expects to add around 16 million MAUs for a total of 631 million. It also expects to add around another 6 million premium subscribers for a total of around 245 million.
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