Spotify’s (NYSE: SPOT) earnings report for the first quarter of 2025 showed mixed results, leading to a 8% drop in its stock price. Despite strong subscriber growth and profits, investors reacted to concerns raised by CEO Daniel Ek about potential short-term challenges.
The report, released on April 29, 2025, highlighted key achievements. Spotify’s premium subscriber base grew by 12% compared to last year, reaching 268 million paying users and surpassing the expected 265 million.
This increase marks the highest number of new subscribers added in the first quarter since 2020, with five million new users joining. Monthly active users also rose by 10% year-over-year to 678 million.
Spotify’s financial performance showed positive trends for Q1 2025. Total revenue increased by 15% compared to the previous year, reaching €4.19 billion ($4.4 billion), which matched the company’s expectations. Premium revenue grew by 16% to €3.771 billion ($3.968 billion), driven by more subscribers and a 4% increase in average revenue per user.
The company achieved a record-high operating profit of €509 million ($535.6 million), though this was below the expected €548 million.
Despite these positive results, the stock drop reflects investor worries. These concerns may stem from Ek’s comments about potential economic challenges and their effects on advertising revenue. Investors also worry about cuts in marketing spending and difficulties caused by a weakening dollar.