Spotify recorded its strongest first-quarter results since going public in 2018 in Q1 2023. As of March 31st, the streaming giant announced that its monthly active users grew to 515 million, a 22 per cent increase year-over-year. The company’s user base grew by 26 million, exceeding the projections the company made by 15 million.

Spotify’s premium subscribers are now 210 million, a 15 per cent increase year-over-year, led by Europe and Latin America, but only a 2 per cent increase from the previous quarter. Out of the 26 million total user growth, most were from the free ad-supported service of the streaming platform.

Despite announcing plans to reduce its employee base by 6 per cent in January, Spotify posted a net operating loss of €156 million ($172 million) for the first quarter of 2023. The operating loss for Q1 2023 is an improvement over the previous quarter, which had a €270 million ($297 million) loss but still some way above the €6 million ($6.6 million) it recorded in Q1 2022.

Thanks to the subscriber gains, total revenue grew by 14 per cent year-over-year from €2.66 billion ($2.93 billion) to €3.04 billion ($3.34 billion). Premium subscribers’ revenue remained fairly steady from Q4 2022, but the ad-supported part saw a 27 per cent drop from €449 million ($494 million) to €329 million ($362 million). There was an increase in revenue from free users by 17 per cent year-over-year.

Spotify, like other big tech companies, have been cutting cost. The 6 per cent workforce it reduced equates to around 600 staff of its total employees. The company is also shutting down side projects like the Clubhouse-like Spotify Live, and Wordle-style music guessing game Heardle.