Spotify has kicked off 2026 with some first quarter financial results especially solidThe music and podcast streaming company has achieved record highs in both net profit and operating profitability. While maintaining its global growth trajectory, its stock market performance has made it clear that investors had anticipated even greater gains following recent price increases.
Although the main business metrics are exceeding those of a year ago, the market has reacted harshly to second-quarter forecasts that fall short of analysts' consensus, especially in Operating margin and rate of premium subscriber acquisitionThis clash between very good current results and a more conservative future direction is at the heart of the debate about the platform's future.
Revenue and profit: a record quarter for Spotify
In the first three months of 2026, Spotify recorded a turnover of 4.533 million eurosThis represents an increase of nearly 8% year-on-year compared to the just over €4.190 billion it billed in the same period of the previous year. The boost has come primarily from the paid subscription business, which remains the cornerstone of its model.
The net profit attributable reached 721 millones de eurosThis is well above the €225 million earned a year earlier. This jump is also reflected in earnings per share: basic earnings per share from continuing operations rose to around €3,5, compared to €1,1 in the previous year, while diluted earnings per share advanced to around €3,45, from €1,07 previously.
On the operational level, the company reported a record operating profit of 715 million eurosThis represents an increase of around 40% compared to the first quarter of 2025. The operating margin improved significantly, climbing to 15,8% compared to 12,1% a year ago, reinforcing the idea that the stage of heavy investment without profitability is behind us, at least for now.
The gross margin was around 33% in the quarterThis figure, while in line with internal targets, marks the current ceiling for the business's gross profitability. For the second quarter, the company projects a slight increase to 33,1%, representing a very modest improvement over the current situation.
Part of the exceptional operating profit for the period is due to one-off factors. During the quarter, Spotify saved approximately 49 million euros in labor costs and social security contributions, largely linked to share-based remuneration and the company's stock market performance, an element that is difficult to replicate in the coming years.
Premium subscribers and active users: this is how the customer base grows
At the end of the first quarter, the platform had accumulated 761 million monthly active users, which is a Spotify subscriber growth of 12%. Of these, 293 million were paid subscribers, 9% more than a year earlier, while the remaining 483 million used Spotify in its free, ad-supported version, 14% higher than the record for the same period in 2025.
In just three months, the company added some three million additional Premium subscribersThis strengthens the weight of the paid segment within the total user base. However, this positive trend in the customer base has not been enough to dispel market doubts about how much room for growth remains, especially in an environment of rising prices.
Spotify projects reaching [number] by the second quarter of 2026. 778 million monthly active usersOf these, approximately 299 million would be paying customers. This forecast implies continued growth in both the free and paid subscriber bases, but at a slightly slower pace than some analysts had anticipated, particularly in the case of Premium subscribers.
From the company's management, the message is one of confidence in their ability to continue engaging listeners. Alex Norström, one of the co-CEOs, emphasized that the platform has exceeded the target of more than 760 million active users and has observed a high participation of both new and reactivated users, which, in its opinion, supports the idea of ​​sustained growth in the medium term with low cancellation rates.
Price increases and the weight of subscriptions versus advertising
The main driver of the first quarter results has been the paid subscriptions, which generated 4.148-4.149 million euros, approximately 10% more than in the same period of 2025. These fees represent the vast majority of Spotify's revenue and, in practice, are what sustain the improvement in margins and profits.
The other major revenue stream, advertising, has not performed as well. Revenue from Ads for users who listen to free music and podcasts amounted to approximately 385 million euros5% less year-on-year. This weakness makes the group even more dependent on the pull of Premium users to continue growing its revenue.
In parallel, the company has continued to adjust the price of its plans in much of the world to strengthen its profitability. In the United States, its main market by revenue, a Standard subscription now costs $12,99 per month Following the latest increase implemented at the beginning of the year, a similar increase has already been applied in other countries such as Estonia and Latvia, and is expected to continue gradually reaching other regions.
In Spain, the platform has followed a similar path: The monthly rate is 11,99 euros from the price review carried out in September 2025. These changes, replicated in other European markets, seek to consolidate the profitability of the Premium business, although they open the debate on to what extent they can slow the pace of attracting new sign-ups and reactivations.
Despite the increase in subscription revenue, the Average revenue per paying user remains virtually flatThe average monthly cost is around €4,7-€4,8, when combining currencies and price levels from different countries. This means that the impact of price increases is lessened by mixing more mature and profitable markets with others where the service is cheaper.
Leadership change and future investment strategy
The beginning of 2026 has also been marked by a significant organizational change in the company's management. Since January, Alex Norström and Gustav Söderström serve as co-CEOs of SpotifyFollowing Daniel Ek's departure from his operational role, the co-founder remains with the group but has handed over the top executive responsibilities to this new duo.
Under this shared leadership model, the company maintains its roadmap focused on growing its user base, consolidating the profitability of its music business, and Strengthen the commitment to artificial intelligence, marketing, and cloud infrastructureSeveral analysis firms interpret that part of the pressure on margins expected in the coming quarters is precisely due to an increase in these investments.
Entities such as Deutsche Bank argue that these Reinvestments can weigh down short-term accountsHowever, these improvements would be necessary to guarantee long-term sustainable growth. The emphasis is on AI-based products, enhanced content personalization, and acquisition campaigns that allow for continued expansion of both the free and paid subscriber bases.
This approach contrasts, to some extent, with the more cautious view of other analysts, who warn that the potential for improvement in profitability could be limited by the cost of new agreements with record labels under the framework known as Streaming 2.0, as well as by the appearance of music generated by artificial intelligencewhich could alter the distribution of revenue between platforms and rights holders.
Stock market, second quarter forecasts and investor reaction
Despite the positive tone of the first-quarter figures, the reaction in the financial markets has been decidedly negative. Following the publication of the results and the guidance for the current quarter, the Spotify shares fell by more than 11% in premarket trading. and registered declines exceeding 14% in the early stages of trading on the New York Stock Exchange. In a subsequent session, the drop reached approximately 12-13%, wiping out billions of dollars in market value.
The main reason for this punishment lies not so much in the data already reported as in what comes next. By the second quarter of 2026, Spotify anticipates a operating profit of approximately 630 million eurosThis falls short of the $673-684 million figure anticipated by analysts. This gap, close to 8% compared to Wall Street expectations, has raised concerns about the platform's ability to continue expanding its profit margins.
The paid subscriber growth forecasts have also disappointed: the company expects to close the period with approximately 299 million Premium customersThis fell short of market estimates, which were around 302 million. Although the figure still represents an increase compared to the previous quarter, the discrepancy with expectations has been enough to fuel distrust among some investors.
Even with this stock market correction, the sentiment of analysts at major banks and investment firms remains largely positive. A very high percentage of Recommendations regarding value remain a buyWith hardly any openly negative opinions, and average target prices clearly above current prices, there is theoretical room for significant increases if the forecasts are met.
The market focus has now shifted towards Spotify's ability to reconcile investment and profitability In the coming quarters, the goal is to ensure robust growth in Premium users and revitalize the advertising business. From there, it will become clear whether the recent setback in the stock market is a temporary setback or marks the beginning of a period of greater skepticism toward the business model.
However, the results for the first quarter of 2026 paint a picture of a Spotify that has finally managed to fit together the pieces of growth and profits, supported by a base of more than 760 million users, a clearly expanding subscription business and margins at historically high levels, although with the constant challenge of convincing investors who are increasingly scrutinizing the evolution of its forecasts and the real impact of its bets on prices, investment and new technologies.
