Spotify’s latest financial report shows a significant surge, with the company adding its largest number of premium subscribers in a first quarter since 2020. The audio streaming service now boasts 268 million premium subscribers, representing a 12% year-over-year increase. Its monthly active users also grew by 10% to 678 million, while monthly ad-supported users reached 423 million.
Spotify also reported a record quarterly operating profit of €509 million (US$528 million), with total revenue up 15% year-on-year to €4.2 billion (US$4.8 billion). Ad-supported revenue also rose 8% year-on-year, driven by growth in impressions sold and partially offset by softness in pricing and optimization of the podcasting inventory in the owned and licensed portfolio.
The company attributes its positive performance to its freemium revenue model, a basic ad-supported service for free and a premium subscription for additional features and an ad-free experience. This model allows Spotify to attract a large user base with the free version and encourages them to upgrade to the premium version for an enhanced experience.
“The underlying data at the moment is very healthy: engagement remains high, retention is strong, and thanks to our freemium model, people have the flexibility to stay with us even when things feel more uncertain,” said Daniel Ek, Spotify founder and CEO. “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.”
The audio streamer unveiled a batch of new ad features at its Advance event held earlier this month in New York. It launched its first programmatic ad exchange platform and introduced Gen AI Ads, which allows advertisers to create AI-assisted scripts and voiceovers. As part of its updates, advertisers can also show ads to users most likely to click and download their app, while new platform features allow brands to optimize their campaigns for the people most likely to visit their website.
Spotify has also been following YouTube’s footsteps by expanding into video podcasts, with more than 330,000 programs now available on its platform. It first introduced a selection of video podcasts in 2020, and then officially rolled out the feature in 2022 to creators in Canada, the U.S., New Zealand, Australia and the U.K. With the growth of its video podcast portfolio, the company announced in February that it would start offering premium subscribers in Canada ad-free podcast viewing and a payment model for podcasters who upload video content.
Additionally, it also recently expanded the availability of its AI Playlist feature to more than 40 additional markets, including countries in Africa, Asia, Europe and the Caribbean. The AI-powered tool, which lets listeners create personalized playlists based on written prompts, was launched in Canada in 2024.
