Spotify Breaks 515 Million Monthly Active Users, Highest Record And Beats Predictions

Spotify Technology SA has passed half a billion monthly active users. (photo: Twitter @eldsjal)

JAKARTA - Spotify Technology SA  has passed half a billion monthly active users for the first time. This achievement is supported by the music streaming company's expansion into more markets. As reported on Tuesday, April 25, Spotify shares are up 5%.

The number of monthly active users rose to 515 million in the first quarter, beating Spotify's guide and analyst estimates of 500 million, according to IBES data from Refinitiv.

Premium subscribers, which account for the bulk of its revenue, rose 15% to 210 million, beating forecasts of 206 million.

.@Spotify's strongest Q1 since going public in 2018 and the second-largest quarter of MAU growth in our history. Thank you to our teams worldwide for all you accomplished. More here: https://t.co/rkCQ3HWu43 pic.twitter.com/NC8FWGG4sR

— Daniel Ek (@eldsjal) April 25, 2023

Its forecast of 217 million premium subscribers for the quarter also beat the forecast of 212 million. The company estimates the number of monthly active users is 530 million.

Spotify last year laid out plans to gain one billion users by 2030 and achieve annual revenue of US$100 billion (IDR 1,496 trillion). They also promise high-margin returns from their costly expansion into podcasts and audiobooks.

"Spotify isn't one magic solution, it's more than 100 or 1,000 things we do that sort of add up and add to the story," CEO Daniel Ek, told Reuters.

However, its quarterly revenue of 3.04 billion euros (50.1 trillion) fell short of the 3.08 billion euros analysts expected, and lost more than expected.

"There was still a bit of a macro bump in Q1 so it impacted us a bit," said Ek.

Many subscribers came on a free trial, or part of a family plan, and Spotify didn't get immediate revenue, which started coming in a quarter later, he said.

The soft ad market due to continued economic uncertainty has led to price drops, which hit Spotify's margins. Gross margin decreased to 25.2% from 25.3% in the previous quarter.

Spotify's forecast for quarterly revenue of 3.2 billion euros was also less than the forecast of 3.26 billion euros.