SPOT · Spotify Technology S.A.

Spotify delivered strong Q1 2026 results with revenue up 8% YoY to €4,533 million, primarily from 10% Premium segment growth to €4,148 million amid 9% subscriber increase to 293 million and 1% ARPU rise to €4.76, offset by 5% Ad-Supported decline to €385 million due to FX headwinds. Gross profit expanded 13% to €1,495 million (33% margin vs. 32% YoY), reflecting revenue growth outpacing royalty costs, with Premium margin improving to 35%. Operating income surged to €715 million from €509 million, driven by 13% R&D reduction to €331 million (lower social costs on share-based comp) and 14% G&A decline to €107 million, partially offset by 9% S&M increase to €342 million from marketing and trials. Finance income of €248 million included €184 million gain on Exchangeable Notes before their full €1,304 million cash settlement upon March maturity, swinging net finance to €222 million profit from €181 million loss. Effective tax rate fell to 23.0% from 31.3%, yielding net income of €721 million (diluted EPS €3.45 vs. €1.07). Balance sheet strengthened with €5,255 million cash (stable QoQ), no debt post-notes repayment, and equity at €8,010 million. Operations generated €836 million cash flow (Free Cash Flow €824 million), funding €306 million share repurchases (773k shares) under ongoing program with US$1.0B+ remaining capacity. User metrics hit record 761 million MAUs (+12% YoY), underscoring engagement via AI features and content enhancements amid macro uncertainty.