spotify It gathered more users than expected in Q1, but revenue fell short of guidance the company blamed for headwinds in its advertising business.
For the first quarter of 2023, the company said its total monthly active users (free and paid) increased by 22% year-over-year to 515 million, “with strength in both developed and emerging markets and in nearly all age groups.” Spotify Premium subscribers reached 210 million with a net gain of 5 million in the quarter, which exceeded expectations with “outstanding performance in all regions, especially in Europe and Latin America”.
Total revenue rose 14% year-over-year to €3.0 billion, below Spotify’s expectation of €3.1 billion “due to macro-related volatility in our advertising business.” The company reported a Q1 operating loss of €156 million, better than the projected €194 million, aided by lower marketing spend. Spotify posted a net loss of €225 million in the first quarter, compared to a net income of €131 million a year ago.
CEO Daniel Ek recorded Spotify’s “strongest Q1 since going public in 2018” and the second-largest MAU growth in its history. tweeted.
Spotify’s overall MAU net additions of 26 million in the quarter were 15 million above guidance – the highest Q1 earnings ever and the fifth consecutive quarter of accelerating growth. Net paid subscriber acquisition of 5 million also reflects a “significant increase” over the previous year’s trend and was 3 million above guidance. Spotify’s previous Q1 guidance predicted 500 million monthly active users and 207 million Premium subscribers.
The company counts on continued user growth in the second quarter: it expects to add 15 million MAUs in the June quarter to reach 530 million, and gain 7 million Premium subscribers to reach 217 million. Spotify estimates Q2 revenue of €3.2 billion and operating loss of €129 million.
Spotify’s ad revenue in the first quarter was €329 million, up 17% year-over-year but down 27% consecutively. Podcast ad revenue grew nearly 20% year-over-year, driven by original and exclusive podcasts where impressions sold were “strong double digits” and CPMs (cost per thousand impressions) increased by “high single digits.” Subscription revenue grew 14% year-over-year, but flattened out to €2.7 billion.
At the Stream On event last month, Spotify launched what it launched. Biggest app redesign to datefeatures a new vertical-feed interface designed to encourage the discovery of new audio content. The company also highlighted the Q1 beta AI DJ launch for users in North America“We are strengthening our personalization efforts.” Additionally, the company payments to music rights holders were approaching $40 billionclaims to repay around 70% of its music revenue to the industry.
As part of cost reduction moves, In January, Spotify announced it was cutting staff by 6%layoffs about 600 employees. The company received €41 million severance in Q1 related to the playoffs. the company is also Heardle is shutting down On May 5, less than a year had passed since Spotify acquired that tune game.
In the company’s Q3 earnings call in October, Ek said: Spotify was considering increasing prices on US subscription plans, following increases by Apple Music and YouTube Premium – but the company has since provided no indication of when a price increase might take effect. Spotify’s individual tier costs $9.99 per month in the US; this is a price that hasn’t changed since the streamer launched the service in 2011.
“We want to raise prices in 2023” in regions like the US, the Annex said in its Q1 call Tuesday, after Spotify increased its rates in 46 markets last year. However, the CEO reiterated that the price increases depend on Spotify’s ongoing negotiations with music companies. “We will increase when the timing is right” [subscription prices]said.