Spotify is set to achieve a milestone $1.5 billion operating profit for 2024, marking the streaming giant’s first-ever profitable full year.
According to the company’s third-quarter financial report, released on November 12, Spotify’s strong performance is largely driven by significant growth in premium subscriptions and ad-supported revenue.
As of the end of Q3 2024, Spotify’s global Premium Subscriber base had reached 252 million, reflecting a 12% year-on-year increase and a 6 million rise from the previous quarter.
This growth surpassed the company’s own forecast by 1 million subscribers, demonstrating continued momentum in its subscription business. Spotify has added 16 million net new paying subscribers year-to-date, bringing its total up from 236 million in Q4 2023.
The company’s Monthly Active Users also showed impressive growth, rising 11% year-on-year to 640 million by the close of Q3. Latin America and other international markets drove much of this increase, with the company continuing its aggressive expansion strategy in these regions. In fact, Spotify’s MAUs grew by 14 million from Q2 2024, surpassing its internal projections.
On the financial front, Spotify reported a 24% year-on-year increase in Premium revenue, reaching €3.516 billion ($3.86 billion) for Q3. Growth was strongest in Europe and Latin America, which saw increases of 38% and 22%, respectively, while North America also posted a solid 27% growth.
Spotify’s ad-supported revenue reached €472 million ($518.4 million) in Q3, up 7% year-on-year. While the company noted challenges in pricing within the advertising sector, its ability to increase impressions sold helped drive steady revenue growth despite market pressures.
Spotify’s gross margin for Q3 stood at 31.1%, with quarterly operating income approaching €454 million ($499 million). For the first three quarters of 2024, the company reported an operating profit of €888 million ($975 million), putting it on track to meet its full-year target of €1.37 billion ($1.5 billion).
With its continued growth across both premium subscriptions and advertising, Spotify is well-positioned to close out 2024 with strong financial results, cementing its place as a leading force in the global music streaming market.
