Spotify announced today that it beat expectations for third-quarter revenue and posted an operating profit of €54 million (about $60 million). This marks the third time in its history that the company has turned a profit, but one of those profits was the result of a tax windfall in 2018 that pushed it into the black.
Spotify’s shareholder letter outlines a variety of reasons for this turn to profitability — a faster new subscriber rate that has boosted the company to 248 million monthly active users (113 million of which are paying, Premium users), less money spent on promoting original content and artist marketing, and new tools for artists like sponsored recommendations that will expand Spotify’s “two-sided marketplace.”
All of this (along with a bunch of other decisions mentioned in the document like share repurchasing) means the company is tightening up its business while…
