Audio streaming giant Spotify posted a first-quarter revenue gain and ended March with 293 million paying premium subscribers, up from 290 million as of the end of 2025. Monthly active users (MAUs) grew to 761 million from 751 million.
Management had previously forecast 293 million premium subs and 759 million MAUs.
But the audio streamer forecast second-quarter earnings and premium subscribers below Wall Street expectations, and advertising trends also disappointed some, pushing the stock down about 12 percent in pre-market trading.
Revenue growth for the quarter accelerated to 8 percent, or 14 percent on a constant currency basis, to get the company to €4.5 billion. Operating income hit at a record €715 million in the first quarter. Profitability has returned to the investor spotlight after price increases and cost cuts.
Spotify predicted operating income of €630 million ($736 million) for the second quarter, below analysts’ estimates, and 299 million paid subscribers for the second quarter.
On the earnings call, executives said they expect 2026 to be a “year of healthy subscriber growth,” but weighted more towards the back half of the year. They added that the prior quarter of subscriber growth had benefitted from adjustments to the company’s i0S app in the U.S. Spotify also plans to continue investing in AI initiatives over “the next quarter or two,” which is contributing to the operating income guidance below expectations.
As the company leans more into AI, executives said Spotify is not planning to increase headcount, but is “spending more compute per employee,” which is resulting in “tremendous return in terms of productivity.” AI initiatives released by Spotify so far include prompted playlists, in which users enter a few words about their mood or activities and generate a music playlist or podcast, as well as AI DJ, which curates playlists for the specific user.
“These features point to something bigger, a transition from a world where Spotify recommends things to you, to a world where you can actively shape, guide and interact with our platform, from passive to interactive, from static to adaptive and from single player to multiplayer, and we think that’s really important, not just for Spotify, but for how people experience media,” said Gustav Söderström, co-CEO of Spotify.
Additionally, it adds to how much time users spend on Spotify, which is an important metric for the company. Spotify also announced a big move into fitness Monday, via a partnership with Peloton, which executives pointed to as a means to increase the number of days users spend with Spotify per month.
Said co-CEO Alex Norström: “We surpassed 760 million MAU, delivered on the subscriber growth we aimed to achieve, and saw healthy engagement from existing users, reactivations and new users alike. Since the global rollout of our more personalized free experience, users in key markets like the US are listening and watching more days per month. All that reinforces our confidence in sustained user and subscriber growth, low churn, and continued progress on revenue and margin.”
Added Söderström: “We’re well positioned because of our large, engaged user base, deep creator relationships, and years of investment in personalization and infrastructure at scale. Together, these create a platform that can take advantage of this moment and unlock entirely new growth vectors that will enable us to climb new mountains previously unimaginable. We see significant room to grow across users, formats and engagement and to expand what Spotify is and can become over time.”
