Spotify Misses User Growth Target Despite Revenue Boost

Spotify reported quarterly results that aligned with analyst expectations but didn't meet its own user growth targets. While revenue saw a minor gain, the Swedish company failed to reach 631 million monthly active users. Profit margins widened as the company implemented cost-cutting measures and promoted new investments in podcasts.

Spotify reported quarterly results broadly in line with analyst expectations on Tuesday but failed to meet its own target for user growth. The Swedish audio-streaming giant sought to reduce costs through layoffs and cuts to its marketing budget last year, while trying to grow its user base through promotions and new investments in podcasts.

Revenue rose to 3.81 billion euros ($4.14 billion) for the second quarter of 2024, just below analysts' estimates of 3.82 billion euros, according to IBES data from LSEG. Spotify had aimed to reach 631 million monthly active users (MAUs) but fell short, attracting 626 million MAUs for the quarter.

The company said it had seen user numbers grow across all regions but had not met its MAU goal due to the continued recalibration of marketing activities. Profit grew steadily to 1.11 billion euros, slightly above analysts' expectations of 1.07 billion euros.

Spotify's gross profit margin widened to 29.2% from 27.6% in the previous quarter. ($1 = 0.9200 euros)