Price Hikes and Subscriber Growth Bring Profits to Spotify

Streaming audio content and podcasting giant Spotify recently released its third quarter financial report, revealing profits of €65 million. Comparing this figure with a loss of €166 million for the same period last year, we can say that the company performed very well this time. According to its representatives, the main reasons for the growth in revenue are the increase in the cost of premium tariff plans and the recovery in the advertising market. At the end of July this year, Spotify raised the price of Premium by just $1, from $9.99 to $10.99. Podcast streamlining and company-wide cost cuts in January helped boost operating profit margins.

In the positive quarter, Spotify Premium subscribers increased by 3%, and monthly active users (MAU) increased by 4% compared to the previous quarter. Both figures even exceeded the company's analysts' forecasts. Compared to 2022, the number of Premium subscription buyers increased by 16%, and MAU increased by 26%. Spotify said that it was the second time in its history that it had seen such an increase in MAU and had already notified investors of the expected further growth of this indicator by the end of the year. As a result, total revenue should increase by 3% and gross profit by 0.2%.

Spotify's quarterly financial report once again provided no timeline for the launch of its lossless audio streaming feature, which was announced back in February 2021. Recent reports suggest that it will be included in the new Supremium plan, which will cost users $19.99 to subscribe to.