“There’s a lot of uncertainty in the world, and when volatility rises, it’s natural to ask who might be affected and how,” said Spotify CEO Daniel Ek kicking off a call with analysts. “I see Spotify faring better than most.”
“People want to be entertained,” he added after first quarter earnings, “and the engagement we are seeing now suggests we are becoming even more essential to people’s lives.”
Companies globally are operating amid a trade war with the U.S. launched by the administration of Donald Trump that threaten to raise consumer prices, pinch pocketbooks and lead to softer advertising.
Spotify shares tumbled after the Q1 numbers and 2025 forecasts and are now down by 9%. Eck had said in the earnings release that “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.” He sought to reassure investors on the call that by “noise” he was not referring to Spotify specifically but to the broader macro environment “that we are all facing at the moment.”
The giant streamer – which just turned 19 — beat on monthly active users, which hit 678 million, up 10% from the years earlier but flat from the previous quarter.
Ad-supported subs rose 9% year-on-year but were flat from Q4 to 2024 to Q1 2025 at 423 million. Premiums subscribers grew 12% on the year and 2% on the quarter sitting at 268 million at the end of March. Spotify said net additions were the highest Q1 since 2020 and second highest in its history.
The streamer, which is based in Stockholm, Sweden, said it expects to add 11 million net new MAUs in Q2 but cautioned that expectations “are subject to substantial uncertainty.”
Eck recalled “back in the day when we hit a million subscribers and we had an internal strategy where I said the goal was to get to a hundred million. And I communicated that to the music industry and I think most of them thought I was completely nuts. I think it was even crazy to imagine that the whole industry let alone one player would have 100 million. And obviously, we’re way past that now.
“If you ask me what is the North Star or goal here … I don’t see it impossible to get to a billion subscribers,” he said. “It’s a much, much larger business than one we are currently operating.”
Ek and other executives on the call said Spotify is seeing positive advertising tailwinds as it adds new capabilities. Video is also growing as the company seeing increasing engagement with video podcasts and music videos and there’s room to expand.
Spotify’s quarterly revenue grew 15% year on year to 4.2 billion euros ($4.8 billion), in line with Wall Street forecasts. The streamer’s operating income hit 509 euros, short of guidance. It generated 534 million euros of free cash flow. Net profit fell to 225 million euros from 326 million on higher payroll taxes.
