Spotify has posted strong third-quarter results for 2024, revealing an 11% increase in monthly active users (MAUs), which now stand at 640 million, and a 12% rise in premium subscribers, reaching 252 million.
Financially, Spotify achieved a 19% year-on-year increase in total revenue, which reached €4 billion ($4.24 billion). The company’s operating income grew to €454 million ($482 million), a commendable increase from previous quarters.
With these results, Spotify is working to continually maintain growth and profitability, ensuring it meets its projected $1.5 billion operating profit for the full year.
A key factor driving this success is Spotify’s pricing and cost-cutting strategies. The platform’s gross margins improved to 31.1%, a successful adjustment in its business model.
The company’s strong performance in premium subscriptions, along with an uptick in ad-supported revenue, has further bolstered its financial health.
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CEO Daniel Ek noted that the company’s success is a direct result of its focus on innovation and market expansion. “We’ve never been in a stronger position,” Ek said.
“Our progress in Q3 demonstrates the strength of our execution and our commitment to growth. We are on track to meet our long-term goals, with continued innovation setting us up for future success.”
One of the drivers behind Spotify’s improved financials is the company’s restructuring in late 2023, which involved significant layoffs. This move, aimed at streamlining operations, helped reduce costs and contributed to Spotify’s strong bottom line.
While layoffs can often be challenging, Spotify has shown resilience, leveraging its workforce reduction to bolster profitability while continuing to attract new subscribers.
Going forward, Spotify is projecting further growth in Q4 2024, with expectations to reach 665 million monthly active users and add another 8 million premium subscribers.
The company is also forecasting an operating income of €481 million ($509 million) and total revenue of €4.1 billion, preparing a record-breaking year as it expands its premium and ad-supported segments.
