Spotify added 3 million subscribers in the first quarter of 2021 and wrapped up March with a total of 158 million subscribers and 208 million free listeners, the company announced Tuesday morning in its latest earnings release. Revenue increased 16% to €2.15 billion ($2.6 billion) from €1.85 billion ($2.22 billion) in the same period last year. Gross margin, the remainder after royalties and other content associated, was 25.5% of total revenue, in line with previous quarters.
Spotify and many other streaming services fared well during the pandemic as people spent more time at home and could not attend concerts or visit movie theaters. Subscriber growth did not stall in 2020, although Spotify’s free service was hit by companies’ sudden and sharp pull-back of advertising spending.
First-quarter subscriber growth of 3 million, from the fourth quarter of 2020, was the lowest quarterly growth rate (in number of subscribers) since the third quarter of 2017 and well below the 8 million, 6 million and 11 million subscribers added in the second, third and fourth quarters of 2020. But 3 million subscribers were at the high end of Spotify’s guidance of 155 million to 158 million.
Financial metrics (Q1 2021 vs. Q1 2021)
- Revenue: €2.15 billion up 16.2% from €1.85 billion
- Gross margin: 25.5% vs. 25.5%
- Operating profit (loss): €14 million vs -€17 million
- Free cash flow: €41 million vs -€21 million
Listener metrics
- Subscribers: 158 million up 21% from 130 million
- Ad-supported listeners: 208 million up 27% from 163 million
- Total listeners: 356 million up 24% from 286 million
Q2 and 2021 guidance
- Q2 2021 Revenue: €366 billion to €373 billion
- Q2 2021 Subscribers: 162 million to 166 million
- 2021 Revenue: €9.11 billion to €9.51 billion
- 2021 Subscribers: 172 million to 184 million
Key events in Q1 2021
- Launched in over 80 news markets — including South Korea — and rolled out 36 new languages on mobile
- Acquired Betty Labs, maker of live audio app Locker Room
- Launched redesigned desktop app and web player
Notable events in Q2 2021
- Spotify’s Anchor podcast app gives podcast creators the option to offer subscriber-only podcasts.
- The launch of Car Thing, a standalone piece of hardware for listening to Spotify in the car
- A new Facebook app for listening to Spotify from within the Facebook app on iOS and Android.
