The streaming company Spotify reports a record-high profit and the number of paying customers increases more than expected.
We're really starting to show that we're not just a fantastic product, but also driving an increasingly fantastic business, says CEO Daniel Ek at an investor conference.
At the opening of the New York Stock Exchange, Spotify's share price rose by 15 percent to 339 dollars, which is the highest valuation since 2021.
Spotify's operating profit for the second quarter amounted to 266 million euros, equivalent to approximately 3.1 billion kronor. This is both a record for the company and almost 30 million euros above market expectations, according to the news agency Bloomberg.
At the same time, revenues increased by 20 percent compared to the same quarter in 2023 and amounted to 3.8 billion euros.
The only disappointment was that the number of monthly users did not increase as much as expected and landed at 626 million, compared to 615 million the previous quarter.
I'm not satisfied with that miss. But it's more about when we reach that figure. We see that we're retaining the new users who come to us, says Daniel Ek at an investor conference.
At the same time, the number of users paying for a subscription increased to 246 million, which was above the company's own expectations. This despite two price increases during the year.
More to be gained in growth markets
Premium customers are mainly found in established markets in Europe, North America, and Latin America. The proportion of those who listen for free is significantly higher in the rest of the world.
The relationship between going from free to paying is not the same everywhere. But despite that, we see that very many go directly to becoming subscribers even in our growth markets, says Daniel Ek.
Shifting between video and just listening
Spotify, as is well known, does not only deal with music but also audiobooks and podcasts, where a video function has been offered for several years.
Against the background of several exclusive agreements with prominent podcasters expiring and more podcasts also starting to offer video, Daniel Ek is asked how this affects podcast listening on the platform.
We see that longer content is doing very well with us. People want to shift between just listening and watching, and that's where Spotify works very well, he says.
