Spotify said it added more paying subscribers even after raising prices in several major markets, with the latest quarterly update showing stronger-than-expected user growth in the first three months of the year. the gains came as it pushed through recent price increases in Ireland and the US, while revenue and operating income also moved higher.
Subscriber growth holds up after price increases
Spotify reported a 12% rise in monthly active users to 761 million in the first quarter, alongside a 9% increase in paying subscribers to 293 million. The figures came after recent price increases, including an 8. 3% rise for Irish premium subscriptions to €12. 99 a month and an 8% increase for US customers to $13 a month from January.
Total revenue rose 14% to €4. 5 billion in the quarter, while operating income reached a record €715 million, up from €509 million a year earlier. Even so, Spotify said it is forecasting operating income to drop month on month to €630 million in the second quarter, a level lower than expected by most analysts.
Spotify management points to user engagement
Alex Norstrom, co-chief executive of Spotify, said the company’s more personalised free experience is driving more listening and watching in key markets such as the US. “All that reinforces our confidence in sustained user and subscriber growth, low churn, and continued progress on revenue and margin, ” he said.
Gustav Soderstrom, co-chief executive, said Spotify is “well positioned” because of its large user base, creator relationships and investment in personalisation and infrastructure. He added that there is “significant room to grow” across users, formats and engagement, and to expand what Spotify can become over time.
Why the market is watching the next quarter
The company’s latest update shows Spotify can still add subscribers even while charging more in major markets, a key signal for investors watching whether demand can withstand higher prices. Spotify also said it is on track for further growth in monthly active users in the second quarter, with sales expected to rise to €4. 8 billion.
The joint leadership of Alex Norstrom and Gustav Soderstrom began in January, adding another layer of attention to the company’s next set of results. For now, Spotify has delivered stronger user and subscriber growth, but the guidance for operating income in the second quarter suggests the next update will matter just as much for the company’s pace of expansion.
