Shares in music streaming and podcasting giant Spotify rose after the company reported an increase in the number of paying subscribers and a rare but lower-than-expected operating profit for the first quarter.
The company posted a "new quarterly high" of €168m in operating profit - a turnaround from a loss of €156m in the same period last year.
Although the figure was lower than the €180m forecast, investors were encouraged and shares in Spotify - which is listed on the New York Stock Exchange - rose more than 13% in the first hours of trading.
Spotify said operating profit was impacted by higher-than-expected payroll taxes, which are related to stock-based compensation.
The audio group also said it had 615 million active users at the end of the quarter, slightly less than the 618 million it had forecast.
About 239 million were paid subscribers, which was right in line with the company's estimates.
Spotify said the business had "performed well" in the quarter, "led by healthy subscriber growth, improved monetisation and record profitability".
"Overall, we are encouraged by the strong start to the year," the company said in its earnings report.
Revenues were up 20% year-on-year to €3.6 billion, but down 1% on the previous quarter.
Since launch, Spotify has invested heavily to drive growth with expansion into new markets and, in later years, exclusive content such as podcasts.
Despite its success in the online music market, the company has never reported a full-year net profit and only occasionally quarterly profits.
It said it expected an operating profit of €250 million in the second quarter of the year.
In December, Spotify announced it would cut staff by about 17% in a bid to reduce costs, which followed previous cuts announced in January and June 2023.
In July 2023, the Swedish company announced it was raising its prices for premium subscribers "in a number of markets around the world," following in the footsteps of similar moves by rival music services from Apple and Amazon. /BGNES
