Spotify Boosts Subscribers and Profit in Q1 2026

Spotify has released its Q1 2026 financial results, demonstrating steady subscriber growth and record profitability, even as its forward guidance fell slightly short of market expectations.

Q1 subscriber growth:

• Premium subscribers reached 293 million, up 3 million QoQ, in line with guidance.

• The performance was driven by growth in Latin America and Europe, alongside “strong global promotional campaign intake.”

Monthly Active Users (MAUs):

• Total MAUs hit 761 million, up 12% YoY.

• That marked an increase of 10 million QoQ, beating guidance by two million.

• Spotify attributed the results to “broad-based regional growth, with outperformance led by Rest of World and North America,” and improvements to Spotify’s mobile free tier.

Revenue performance:

• Total revenue: €4.53 billion ($5.3bn), up 14% YoY at constant currency.

• Premium revenue: €4.15 billion ($4.85bn), a 15% increase YoY at constant currency, driven by subscriber gains.

• Ad-supported revenue: €385 million ($450.5m), a 3% rise YoY at constant currency, driven by a higher volume of ads, but partially offset by weaker pricing.

• Growth in podcast ads was led by sponsorship gains within Spotify's Owned & Licensed portfolio.

• Premium monthly ARPU was €4.76 ($5.57), a 5.7% boost YoY at constant currency, delivered by recent price increases.

Profitability:

• Quarterly operating income: €715 million ($836.8m), up 46% YoY at constant currency due to lower-than-expected Social Charges and Gross Margin strength.

• Net income: €721 million ($843.58m), up from €225 million YoY.

• Gross margin: 33.0%, up from 31.6% in Q1 2025.

• Higher costs were driven by marketing, cloud, and AI investments.

Q2 2026 outlook:

• Spotify predicts:

• 778 million MAUs, up 17 million by the end of June.

• 299 million Premium subscribers, a bump of six million but below analyst estimates of 302 million, as per Music Business Worldwide.

• €4.8 billion revenue for the quarter.

• €630 million operating income, below the LSEG-compiled Wall Street consensus of approximately €684 million, as per MBW.

• Shares fell 9% in premarket trading off the back of the forecast.