Spotify‘s Q1 2023 results are in.
The music streaming company added another 5 million net Premium subscribers to its user base in Q1 2023 (the three months to end of March), taking its total global paying subs audience to 210 million.
Those 210 million subscribers marked Premium Subscriber growth of 15% YoY, and was 3 million above the company’s guidance for the quarter.
Spotify says that its overall Premium subscriber growth was driven by “outperformance across all regions”, led by Europe and Latin America.
The company also cites “regional campaign outperformance and continued strength in multi-user plans” as a reason behind its Premium subscription growth in Q1.
Spotify forecasts that it will end Q2 (the three months to end of June) with 217 million Premium subscribers, which would imply 7 million net new subscriber additions in the quarter.
Spotify’s total number of Monthly Active Users, which combine paying users and ad-supported users, grew by 22% YoY to 515 million at the end of Q1 2023.
That total MAU figure was up 26 million versus the prior quarter (Q4 2022) and 15 million above SPOT’s guidance for the quarter.
SPOT says that those net additions of 26 million MAUs represented its largest-ever Q1 growth, “driven by performance in both developed and developing markets, and across nearly all age demographics”.
Spotify also pins its MAU growth on “continued momentum as a result of increased brand awareness, retention improvements and performance marketing efficiencies”.
The streaming giant’s MAU guidance for Q2 (the three months to end of June) is 530 million MAUs, which would imply approximately 15 million net new MAUs in the quarter.
In Q1 Spotify’s ad-supported MAUs grew by 22 million versus the prior quarter (Q4 2022) to reach 317 million in Q1, up 26% YoY (see below).
In terms of finances, Spotify generated €3.04 billion in quarterly revenue in Q1, which was up 13% YoY at constant currency.
That revenue growth was slightly below SPOT’s expectations due to what it says was “macro-related variability in our advertising business”.
The company’s Premium /subscriber revenues stood at €2.7 billion in Q1, up 13% YoY at constant currency.
Spotify’s Ad-Supported Revenue in Q1 2023 was €329 million, up 13% YoY at constant currency.
SPOT’s Gross Margin finished above guidance at 25.2% reflecting what it said was “improved music and improving podcast profitability.”
In terms of profitability, Spotify posted an operating loss of €156 million.
“Overall, we are encouraged by the strong start to 2023,” said the company in its investor presentation published on Tuesday (April 25).
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