Spotify reports 14% revenue growth in Q1

In the first quarter, the platform reported 761 million monthly active users, marking a 12 percent year-on-year increase, while premium subscribers grew 9 percent to 293 million

by e4m Staff
Published: Apr 30, 2026 10:35 AM | 2 min read

Spotify reported 761 million monthly active users and 293 million premium subscribers in Q1 2026, reflecting year-on-year growth of 12% and 9%, respectively.
Total revenue increased by 14% to nearly $4.9 billion, with a gross margin of 33% and operating income around $780 million.
The advertising segment saw only a 3% growth in ad-supported revenue due to ongoing adjustments from a major infrastructure overhaul, shifting towards a programmatic model.
Spotify's free tier remains significant, with 483 million ad-supported users, and the company plans to enhance monetization and user engagement through new product innovations and deeper integration of podcasts and audiobooks.

Spotify began 2026 on a strong footing with sustained user growth, improving margins and rising revenues, even as its advertising business continues to recalibrate following a major structural overhaul.

In the first quarter, the platform reported 761 million monthly active users, marking a 12 percent year-on-year increase, while premium subscribers grew 9 percent to 293 million. Total revenue rose 14 percent to nearly $4.9 billion, supported by steady subscription growth and higher average revenue per user. Gross margin reached 33 percent, among the company’s highest to date, with operating income touching approximately $780 million.

However, advertising performance remained subdued. Ad-supported revenue grew just 3 percent year-on-year, reflecting ongoing adjustments after an 18-month rebuild of Spotify’s advertising infrastructure. The company has transitioned from traditional direct sales to a biddable, programmatic model, aligning with evolving advertiser preferences.

Programmatic formats now account for more than one-third of advertising revenue, with automated channels contributing over 30 percent. While these formats are expanding rapidly, legacy direct sales continue to show volatility, creating short-term pressure on overall ad growth.

Spotify’s free tier continues to play a crucial role in its ecosystem, with 483 million ad-supported users, up 14 percent year-on-year. Increased engagement from this segment is strengthening the funnel for future subscriptions, even as monetisation lags behind usage trends.

The company also highlighted deeper integration of podcasts and audiobooks into its platform, alongside new product innovations such as AI-driven playlist features and a fitness content hub.

Looking ahead, Spotify anticipates a stronger performance in the latter half of 2026, driven by the continued expansion of programmatic advertising and gradual improvement in converting engagement into revenue. As its automated ad ecosystem matures, the company expects monetisation to better align with its growing user base.