Swedish music streaming major Spotify released its first quarter earnings on Tuesday, and its investors immediately rewarded its results – its shares climbed more than 10 per cent.
Its total monthly active users (MAU) for Q1 2024 stood at 615 million, up 19 per cent over the 515 million MAUs in Q1 2023.
Its total revenue for Q1 2024 was approximately A$6.02 billion (Eur3.64 billion), a significant 20 per cent increase from around A$5.01 billion (Eur3.04 billion) in the same quarter last year.
For the first time in its history, gross profit crossed A$1.65 billion (Eur1 billion) in Q1 2024.
Importantly, a metric that indicates that Spotify is getting its revenue-generation pipeline in place, is that in Q1 2024, premium subscribers grew 14 per cent year-on-year to 239 million, led by growth in Family and Duo plans.
As ChannelNews recently reported, Spotify is set to raise subscription prices across major markets including the US, UK, Australia, and Pakistan.
It will likely increase prices by about US$1 to US$2 a month in five markets including the UK and Australia by the end of April. The price rise in the US will be introduced later this year.
Additionally, it will introduce a new basic tier for the existing monthly price of an individual plan (which in Australia is $12.99 a month), and this plan will include access to music and podcasts, though not its audiobooks.
The company is also reportedly working on a “supremium” plan, which would charge customers a higher price for access to high-fidelity audio., and therefore finding new avenues to generate additional revenue.
While declaring its latest numbers, Spotify also issued its forecast for the current quarter. It expects net new MAUs of 16 million, taking its total to 631 million monthly active users.
“We’ve talked about 2024 as the year of monetization and we’re delivering on that ambition,” said Spotify co-founder and CEO Daniel Ek.
“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.”
