Spotify reaches 500 million active users in Q1, paid subscribers grow 14%

Across developed and developing markets, Spotify reported its largest-ever member addition in Q1

According to Spotify, the company's overall user base for the quarter has reached 515 million, the second largest quarter-over-quarter increase in its history.

In Q1 2023, Spotify, which counts India among its top five markets, did not disclose specific information about its performance in the country.

Almost all age groups experienced growth across developed and developing markets, driven by higher reactivations, improved retention, and marketing efficiency, according to the company.

The audio streaming service announced several new features and products in March 2023, including a TikTok-style video feed on iOS and Android to boost app engagement.

Financial performance

From a net loss of $6.62 million a year ago, Spotify's operating losses shot up to €156 million in the quarter. This was due to higher personnel costs driven by headcount growth over the past year partially offset by lower marketing and legal costs.

A total of €3.04 billion ($3.35 billion) was generated for the quarter, up 14 percent from €2.66 billion ($2.93 billion) a year ago.

For the quarter, subscription revenue increased by 14 percent YoY to €2.71 billion (about $3 billion). Subscription revenue per user declined by 1% to €4.32 ($4.76) for the quarter.

Ad revenue grew 17 percent to €329 million (around $362.9). It contributed about 10.8 percent to Spotify's revenue. Podcast revenue grew by nearly 20 percent YoY, driven by original and exclusive podcasts.

In the current quarter, Spotify expects to grow its paid subscriber base to 217 million and its overall base to 530 million. Revenues are expected to reach €3.2 billion ($3.5 billion) and operating losses to reach €129 million ($142.3 million).