STOCKHOLM, April 28 — Spotify posted today a rare net profit in the first quarter and a sharp increase in paid subscribers as the music streaming giant launched in dozens of new markets.

The Swedish company netted a modest €23 million (US$27.8 million) in the first three months of the year — only the fifth quarterly profit since Spotify went public in 2018.

The company attributed the gain to a recent drop in its stock price which lessened the burden of employee compensation — social charges were some €35 million lower than forecast as they include share-based payments to staff.

Revenue, meanwhile, rose 16 per cent year-on-year to €2.15 billion, Spotify said in its quarterly report.

At the end of March, the number of monthly active users reached a total of 356 million, with the number of paying subscribers up by 21 per cent to 158 million.

In February, Spotify announced it had launched in more than 80 new countries with a combined population of one billion, including heavily populated nations such as Nigeria, Pakistan and Bangladesh. 

These launches brought its presence to the vast majority of the world’s countries — nearly 170.

Spotify has never posted a full-year net profit despite its success in the online music market. 

Last year, the Swedish company tripled its net loss to €581 million, partly due to a strong share price pushing up its compensation costs.

The music streaming company has invested heavily in podcasts in recent years, and said it saw "an all-time high in terms of podcast share of overall platform consumption hours” in March.

In the second quarter, it expects to reach 366 to 373 million monthly active users and 162 to 166 million paying subscribers. — AFP