Operating profit, increase in users... Spotify signs “a truly exceptional quarter”

The world's number one audio platform Spotify recorded a 26% increase in active users and posted a rare operating profit in the third quarter, it announced on Tuesday. “A truly exceptional quarter. We are improving step by step,” said Daniel Ek, founder and CEO of Spotify on X (formerly Twitter). The group had 574 million active users at the end of the quarter, or 23 million more over one year, which represents “its second strongest growth” in its history, according to the press release.

Spotify hopes to surpass 600 million active users by the end of the year. The platform also announced a 16% increase in its paying subscribers, which constitute the majority of its turnover, to 226 million. Its turnover increased by 11% to 3.4 billion euros and its operating profit reached 32 million euros, compared to a loss of 228 million a year earlier. The second quarter of 2023 was also marked by a loss of 247 million euros.

The platform, based in Stockholm but listed in New York, was occasionally profitable in certain quarters. But it regularly makes losses, despite meteoric growth in the number of its subscribers and a lead over its competitors, such as Apple Music or Amazon Music. It announced at the beginning of June the elimination of around 200 positions in its podcast activities, or 2% of its workforce, after a first wave of 600 job cuts at the start of the year.

The Swedish company, listed on Nasdaq, decided in July to increase the prices of its premium subscriptions in most of its markets, following in the footsteps of its competitors Apple and Amazon. In 2017, Spotify had 3,000 people and more than tripled its workforce to 9,800 employees at the end of 2022. It has never posted a net profit over an entire financial year.