Q1 2025 Spotify Technology SA Earnings Call Transcript
Key Points
- Spotify Technology SA (SPOT) reported strong subscriber growth, with the highest Q1 net adds since 2020, driven significantly by emerging markets.
- The company achieved a 15% year-on-year revenue growth on a constant currency basis, with premium revenue rising 16% due to subscriber growth and ARPU gains.
- Spotify's gross margin improved to 31.6%, surpassing guidance and expanding by 400 basis points year-on-year.
- The Spotify Partner Program has been successful, paying out over $100 million to podcast creators in Q1, and expanding to nine new markets.
- Spotify continues to innovate rapidly, reducing the time to roll out new features across devices and expanding its offerings in video podcasts and audiobooks.
- The macroeconomic environment remains uncertain, which could potentially impact Spotify Technology SA (SPOT) if extreme conditions arise.
- Advertising revenue growth was modest at 5% year-on-year, with some softness in advertising pricing noted.
- Operating income was impacted by higher-than-forecasted social charges, which were EUR 58 million above expectations.
- The company faces challenges in maintaining MAU growth, with Q1 growth being softer due to seasonality and the impact of Wrapped.
- There is a need for alignment and support from industry partners to offer new experiences, which could delay the introduction of higher-tier subscription offerings.
Welcome to Spotify's first-quarter 2025 earnings call and webcast. (Operator Instructions)
As a reminder, this conference call is being recorded. I would now like to turn the call over to Bryan Goldberg, Head of Investor Relations. Thank you. Please go ahead.
Thanks, operator, and welcome to Spotify's first-quarter 2025 earnings conference call. Joining us today will be Daniel Ek, our CEO; Alex Norstrom, our Co-President and Chief Business Officer; Gustav Soederstroem, our Co-President and Chief Product and Technology Officer; and Christian Luiga, our CFO.
(Event Instructions) Before we begin, let me quickly cover the Safe Harbor. During this call, we'll be making certain forward-looking statements, including projections or estimates about the future performance of the company. These statements are based on current expectations and assumptions that are subject to risks and uncertainties, actual results could materially differ because of factors discussed on today's call, in
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