Spotify’s first quarter revenue rose 15% as its subscriber base increased 12%, the company’s highest first quarter subscriber gains since early in the COVID-19 pandemic, the company reported on Tuesday.
The music and podcast streaming giant reported total revenue of 4.2 billion euros ($4.54 billion) in the quarter ending March 31, and total paying subscribers of 268 million, according to filings.
“The underlying data at the moment is very healthy, engagement remains high, retention is strong,” Spotify founder and CEO Daniel Ek said in a statement.
The company’s operating income, which measures the company’s profit minus costs, rose to 509 million euros ($579 million). Spotify’s gross margin, the percentage of money it keeps on a sale after costs are taken out, improved 400 basis points from last year to 31.6%.
The company noted that this marked the highest gains for subscribers in the first quarter since 2020, when millions signed up for Spotify accounts at the start of the pandemic. Monthly average users also rose 10% to 678 million compared to this quarter a year ago.
The demand for music streaming comes in a period marked by heightened global and macroeconomic uncertainty, Ek noted.
“Thanks to our freemium model people have the flexibility to stay with us even when things feel more uncertain,” Ek said. “So yes, the short term may bring some noise, but we remain confident in the long-term story, and the direction we’re heading in feels clearer than ever.”
Ek and other Spotify executives will discuss the company’s earnings in more detail on a call with investors and analysts at 8:30 a.m. in New York.
The Financial Times reported last week (April 25) that Spotify is preparing to raise the monthly price of its individual subscriptions across Europe and Latin America by about one euro as soon as this summer.
Here are the company’s first quarter highlights:
- Subscribers increased 12% Y/Y to 268 million.
- Monthly Active Users reached 678 million up by 10% Y/Y.
- Total Revenue was up 15% Y/Y to €4.2 billion.
- Gross Margin improved by ~400 bps YoY to 31.6%.
- Operating Income rose to €509M.
