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Figures included in Spotify’s investor presentation released on April 25 show 15% year-over-year (YoY) growth, exceeding the streaming service’s quarterly forecast of 3 million.
“Overall, we are encouraged to have a strong start to 2023,” Spotify said. “It was the strongest first quarter since the 2018 IPO, with nearly all his KPIs beating expectations.”
Spotify believes that user growth is showing “good performance” across all regions, with Europe and Latin America leading the charge. It also noted the “outperformance of regional campaigns and continued strength of multi-user plans.”
Spotify expects to end the second quarter in June with 217 million premium subscribers.
Spotify’s Monthly Active Users (MAU), made up of both paying and ad-supported users, grew 22% to 515 million at the end of Q1.
Its total MAU figure increased by 26 million from the previous quarter (Q4 2022) and exceeded its guidance for the quarter by 15 million.
Spotify said its 26 million MAU net additions represented its largest ever first-quarter growth “due to performance in both developed and developing markets and across nearly all age demographics.” increase.
Spotify also describes MAU growth as “continued momentum as a result of increased brand awareness, improved retention, and greater efficiency in performance marketing.”
The streaming giant’s guidance for Q2 is 530 million MAU, which translates to about 15 million net new MAUs for the quarter.
In Q1, Spotify’s ad-supported MAUs increased by 22 million compared to the previous quarter (Q4 2022), reaching 317 million in Q1, a 26% year-over-year increase (see below). reference).
Financially, Spotify generated quarterly revenue of €3.04 billion ($3.4 billion) in the first quarter, up 13% year-on-year at constant currencies. However, it posted an operating loss of €156 million.
Its revenue growth was slightly below expectations due to what the company described as “macro-related volatility in the advertising business.”
The company’s first quarter premium/subscriber revenue was €2.7 billion, up 13% year-on-year at constant currencies.
In Q1 2023, Spotify’s advertising revenue was €329 million, up 13% year-on-year at constant currency.
Summary of Spotify Q1 2023 results:
- MAU grew 22% year-on-year to reach 515 million, driven by strength in both developed and developing markets and across all age groups.
- Premium subscribers grew 15% year-over-year to 210 million, with all regions performing well, led by Europe and Latin America.
- Total revenues increased 14% year-on-year to €3.0 billion, driven by subscriber growth.
- Gross margin reached 25.2%, reflecting improved profitability in music and podcasts.
- Operating loss amounted to €156 million due to lower marketing expenses.
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