Spotify shares jumped over 12 per cent on Tuesday after it broke a profit record in its first quarter, surpassing one billion euros (£860m) for the first time.
The Swedish streamer said operating income also finished the quarter at a record high of €168m (£144m) as lower employee and marketing spend has improved the company’s balance sheet.
In a bid to boost profit, Spotify axed 1,500 jobs in December, equivalent to 17 per cent of its workforce, which now consists of over 7,700 full time employees.
Quarterly revenue grew 20 per cent on the previous year to €3.6bn (£3bn) and the company added three million subscribers in the three months ending 31 March, up 14 per cent year on year.
Premium subscribers grew 14 per cent year on year to 239m, which Spotify said was thanks to growth in Family and Duo plans.
But the platform, which has recently been entangled in a battle with Apple, missed its forecast for monthly active users. Although these grew from 602m to 615m, it fell short of Spotify’s own guidance by three million due to the dampened marketing activity.
Daniel Ek, Spotify founder and chief executive, said: “We’ve talked about 2024 as the year of monetization and we’re delivering on that ambition.
“Now as we’ve shifted to focus on strong revenue growth and margin expansion, we see a clear opportunity to ensure we are also continuing to grow the top of our funnel.
“I feel good about the changes we are implementing and remain very confident in our ability to reach the ambitious plans we’ve outlined.”
On Tuesday he also said Spotify plans to ramp up marketing spend this year, admitting the company “may have pulled back a little bit too much.”