0 Comments
Despite an uncertain market, Spotify has managed to survive the storm of tariffs and reluctant consumer spending. It continued to gain subscribers during the first quarter of the year.
Well, one thing is for certain. Spotify isn’t going anywhere.
The company just published its financial report for the first quarter of this year. Monthly active users grew 10% to 678 million, which is in line with its prior estimates. Paying, premium subscribers also rose 12% to 268 million, which surpassed previous estimations.
All in, Spotify published profits of $256 million USD, with revenue rising 15% to roughly $5.6 billion USD. The average revenue per user for its subscription model also increased 4% to $5.38 USD. This is partly thanks to a rise in subscription fees.
Spotify has been looking into growing its ad-supported revenue, with aims of establishing this model as a greater part of its overall strategy. This grew by 8%, with both podcasts and music driving exposure to advertisements upward.
The company is likely to be able to withstand any tariff uncertainties and recession turbulence, particularly as Spotify is seen as a cheaper expense and an essential for many.
As we’ve previously explored, Gen Z primarily use streaming to listen to music and rely on Spotify every day. It would take a huge industry shift for current customers to leave the platform.
It has also been investing heavily in podcasts and visual content, having paid over $100 million USD to podcasters for exclusive rights over the first quarter of this year.
Spotify will be eager to challenge YouTube on its dominance of long-form video, especially as more of us are consuming video than ever before.
Despite all the solid data published in this latest earnings report, stocks in the company tumbled by as much as 9% in response. Investors are seemingly spooked that the streaming giant’s growth could be plateauing, especially as its predictions for the second quarter of this year are below Wall Street expectations.
