Music streaming giant Spotify has unveiled its highest-ever profits, exceeding €1 billion (£860 million), following a year marked by cost reductions and workforce layoffs. Despite this success, the company faced challenges in meeting its forecast for monthly active users. Last year, Spotify implemented a 17% reduction in its workforce, amounting to approximately 1,500 job cuts, as part of efforts to control expenditures. CEO Daniel Ek outlined the necessity for these measures in December, characterizing them as significant steps to align costs with the company's objectives. Despite the workforce reduction, Spotify remains committed to global expansion and aims to achieve a user base of one billion by 2030.

Spotify has made substantial investments exceeding a billion euros into its podcasting realm, including hefty expenditures on popular shows like "The Joe Rogan Experience," which amounted to hundreds of millions. CEO Mr. Ek highlighted the transformative shift of podcasting from a financial burden to a profitable segment for the company.

The streaming giant reported a 20% increase in quarterly revenue to €3.64 billion, surpassing estimates of €3.61 billion. To bolster revenue, Spotify implemented price hikes and explored various subscription models, including a music-only tier tailored for users solely interested in music content.

Despite falling slightly short of its own forecast with 615 million users, Spotify remains focused on achieving 631 million users by mid-year. Encouragingly, premium subscribers increased by 14% in the first quarter to reach 239 million, aligning with expectations.

Initially, Spotify shares experienced a downturn following the quarterly results but rebounded with an 8% surge in premarket trading on Tuesday. Since its inception in 2006, Spotify has dedicated significant resources to business expansion and securing exclusive content deals.

The platform has hosted podcasts featuring prominent figures like Michelle and Barack Obama, as well as the Duke and Duchess of Sussex. Notably, the deal with Harry and Meghan reportedly cost $25 million (£19.7 million) and included the delivery of 12 episodes over two-and-a-half years before concluding in June last year.