Music streaming giant Spotify registered a quarterly gross profit of over €1bn (£860m) .
The giant has been growing its user base for years, offering subscribers access to podcasts and audiobooks; however the quarterly gross profit came at the expense of missing its forecast for monthly active users.
Much of Spotify's profits were driven by its podcast business. Gross margins rose to 27.6% in the quarter, up from 25.2% a year earlier.
It invested over a billion euros to build up its podcast business, including spending hundreds of millions for popular shows. The company's quarterly revenue rose 20% to €3.64bn, beating estimates of €3.61bn.
Spotify raised prices to boost revenue and experimented with different subscription plans.
The streaming service would also provide a music-only tier for "those consumers that only care about the music side", the firm's Chief Executive Officer Daniel Ek said.
Spotify currently has 615 million users, a shade down on its own forecast of 618 million for the quarter. It aims to have 631 million midway through the year.
However, the number of premium subscribers rose by 14% in the first quarter to 239 million, in line with estimates.
Spotify shares, which initially fell on the quarter results, reversed course to rise 8% in premarket trading.
The Swedish company made the achievements after a year of cutting costs and laying off staff ,” Last year “2023 “it cut 17% of its workforce in a move to clamp down on costs”.
