Spotify continues to grow its user base, with monthly active users rising 11% year-on-year to reach 696 million—exceeding expectations. "People come to Spotify and they stay on Spotify. By constantly evolving, we create more and more value for the almost 700 million people using our platform," said Daniel Ek, the company's founder and CEO.
However, despite this growth, Spotify reported an operating profit of €406 million ($468 million), which marks a 52.6% increase but falls short of the projected €539 million. The shortfall was attributed to increased salary expenses, changes in the company’s revenue mix, and notably higher social charges. In fact, social charges came in €98 million above forecast due to share price appreciation during the quarter.
Total revenue for the company rose by 10.1% to €4.19 billion.
This mixed financial performance comes amid growing concerns around AI-generated music. Spotify has been drawn into the debate over the use of artificial intelligence in music creation, as artists raise alarms over being overshadowed by AI-composed tracks. While some platforms like Deezer are taking steps to flag AI-generated music, Spotify has yet to implement such measures.
Responding to concerns, Daniel Ek stated in May that AI does not pose a threat to the music industry and could instead be a tool for enhancing creativity.
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