Spotify may be the biggest music streaming service in the market but the company hasn’t really been raking in the profits. It has actually just posted its first ever quarterly earnings profit which was driven by a strong margin and slower headcount growth than the company had previously expected. Spotify has previously said that it assigns more priority to growth over profits.
Spotify reported its Q4 results today which revealed that its monthly active users have hit 207 million which is a 30 percent increase compared to the same period a year ago. This was the first time ever that Spotify posted a positive operating profit of €94 million on net income of €442 million.
The company’s biggest revenue generator is its paid subscription tier and it continues to see an increase in numbers as Spotify expands in more markets. The music streaming service now has 96 million paying subscribers which is a 36 percent improved compared to a year ago.
It attributed a chunk of the gains to promotions with Google Home which was the first hardware bundle for the company in addition to the holiday season which tends to bring about an increase in the subscriber numbers. Revenues from the paid tiers now accounted for 88 percent of the company’s total revenue in Q4.