Proactive Investors - Spotify Technology SA (NYSE:SPOT) soared 15% on Tuesday after it posted record profits during its first quarter, with sales also beating Wall Street expectations.
Earnings per share during the three months came in at a record US$0.97 compared to the US$0.65 analysts had been expecting.
Sales in the quarter marginally beat market guidance, having reached US$3.64 billion against the US$3.61 billion forecast.
Despite the impressive financials, Spotify is still facing slightly weaker demand after monthly active users came in at 615 million, flagging analysts’ expectations of 618 million.
It comes after the music streaming group underwent a strict turnaround plan which resulted in more than a quarter of its workers being sacked.
While it signed a new US$250 million contract with podcaster Joe Rogan earlier this year, it has been scaling back its investment into said segment of the business.
Looking forward to the next quarter, Spotify expects to gain 16 new monthly active users, while improving its gross margin through further cost-cutting measures.
“Overall, we are encouraged by the strong start to the year and view the business as well positioned to deliver,” the Swedish company said in its earnings presentation.