Spotify added about five million paid users but fell short of forecasted operating income during Q1 2025. Meanwhile, execs seem to have changed their tune about the Super-Premium tier’s release timetable.
The streaming service revealed these performance particulars in its Q1 2025 earnings report this morning. In the breakdown, Spotify pointed to 678 million MAUs (up 10% YoY), including 268 million paid subscribers (up 12% YoY) and 423 million ad-supported listeners (a decrease of two million from Q4).
MAUs hit the previously issued forecast, and subs surpassed the 265 million anticipated by execs. Geographically, users outside of North America and Europe now account for 56% of Spotify’s MAUs – but subs, despite Q1 upticks for Latin America and Rest of World, remain heavily concentrated in the former two regions.
Thanks mainly to the solid subscribership showing, total revenue spiked 15% YoY to just shy of the targeted $4.79 billion/€4.2 billion, the Spotify earnings report shows. Of course, subscriptions, benefiting from continued price bumps, kicked in the lion’s share of the sum ($4.30 billion/€3.77 billion, up 16% YoY and 2% QoQ).
And on the advert front, “automated sales channels were the largest contributors to overall advertising growth,” communicated Spotify, which debuted a new ad exchange and AI marketing options earlier in April.
Evidently, the market (and specifically analysts who’d rallied behind astronomical Spotify stock targets beforehand) weren’t thrilled with the report.
That presumably refers to Spotify’s $580.29 million/€509 million in Q1 2025 operating income, which, while up 203% YoY, fell short of the forecasted $624.74 million/€548 million. In brief, higher-ups attributed the miss to “social charges,” which were $66.12 million/€58 million more than expected due to “share price appreciation during the quarter.”
Additionally, Spotify is banking on $4.90 billion/€4.3 billion in revenue and $614.46 million/€539 million in operating income for Q2, when subs are expected to crack 273 million.
At the time of writing, Spotify stock (NYSE: SPOT), hovering around $564 per share, was down about 5.7% from opening. Nevertheless, that value is still almost double SPOT’s worth in late April 2024.
Back to the initially mentioned Super-Premium offering, it’s been nearly one year since Spotify head Daniel Ek confirmed plans for a long-awaited tier geared towards superfans. Furthermore, rumblings in February 2025 suggested that the higher-priced listening option would roll out in phases this year.
Though the launch could still be teed up for 2025, Ek, now emphasizing growth opportunities for existing subscriptions, appears to have adopted a less urgent position here.
“But for the very, very long term, it [the Super-Premium option] is an upside opportunity for Spotify,” Ek said during the Spotify earnings call, “but I think one where, if I look at it from the music industry standpoint, this is a huge part for the music industry.
“But for the near term, the way to think about it for Spotify is, we’re not dependent on that for growth, but we want to make it happen. … [F]or the superfan [subscription tier], we do need the partners to come to the table and be part of this trip,” he proceeded.
Translation: obstacles are preventing the Super-Premium takeoff. With the major labels champing at the bit to begin charging diehard fans larger monthly fees, those obstacles presumably pertain to the compositional side, where Spotify’s bundling craze still isn’t sitting right with the NMPA and a variety of others.
Overall, the remainder of the Spotify earnings call didn’t cover too many noteworthy details. One analyst did ask about charging for an ad-supported tier with bolstered functionality; execs more or less dismissed the possibility.
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