Spotify is predicting a first-quarter profit that surpasses market expectations, thanks to consistent user growth, price increases, and a focus on cutting costs. 

The company is looking at an operating income of 548 million euros ($566.19 million) for the current quarter, which is higher than the average analyst estimate of 450.6 million euros, based on data from LSEG.

Last June, Spotify raised its service prices and has been careful with expenses, especially in marketing, to improve its profit margins.

Analysts note that the company's emphasis on music and podcast video content has drawn in more users. They've also expanded their music video testing to new regions and introduced features that enhance engagement for content creators in select markets.

For the first quarter, Spotify anticipates having 678 million monthly active users (MAUs), which aligns closely with the estimate of 679.4 million. They expect to gain around 2 million premium subscribers, bringing the total to 265 million, which is above the Visible Alpha estimate of 263.2 million.

In the fourth quarter, premium subscribers grew by 11% to reach 263 million, exceeding the Visible Alpha estimate of 260 million. MAUs also increased by 12% to 675 million, surpassing expectations.

Revenue for the fourth quarter climbed 16% to 4.24 billion euros, beating the estimates of 4.19 billion euros, fueled by subscriber growth and a rise in average revenue per user.

Gross profit soared by 40% to 1.37 billion euros, compared to the estimated 1.32 billion euros, with the gross profit margin improving to 32.2% from 31.1% in the previous quarter.

For the first quarter, the company is forecasting revenue of 4.2 billion euros, slightly above the estimates of 4.17 billion euros.