--- title: "Spotify: Solid Results, Big Tax Bill" description: "Spotify reported strong Q1 2025 results with revenue of 4.2 billion euros, a 16% increase year-over-year, and premium subscribers rising to 268 million, up 12%. However, earnings per share missed expe" type: "news" locale: "en" url: "https://longbridge.com/en/news/238080613.md" published_at: "2025-04-29T13:46:20.000Z" --- # Spotify: Solid Results, Big Tax Bill > Spotify reported strong Q1 2025 results with revenue of 4.2 billion euros, a 16% increase year-over-year, and premium subscribers rising to 268 million, up 12%. However, earnings per share missed expectations at 1.07 euros due to higher employment taxes of 76 million euros linked to a 106% share price increase. Despite a 6% drop in share prices post-earnings, Spotify anticipates continued growth in users and premium subscribers, although it faces potential headwinds from consumer spending and currency volatility. Here's our initial take on **Spotify**'s (SPOT -6.42%) fiscal 2025 first-quarter financial report. ## Key Metrics Metric Q1 2024 Q1 2025 Change vs. Expectations Revenue 3.6 billion euros 4.2 billion euros 16% Met Earnings per share 0.97 euros 1.07 euros 10% Missed Premium subscribers 239 million 268 million 12% Beat Free cash flow 207 million euros 534 million euros 158% n/a ## Spotify Sees Growth Everywhere, Including Taxes Spotify's 2024 momentum continued in the first three months of 2025, with the company reporting active monthly users up 10% to 678 million and premium subscribers up 12% to 268 million. It translated into solid 16% year-over-year revenue growth and 10% earnings growth for the quarter. Alas, some of Spotify's success is taking a toll on results. Spotify's EPS result came in significantly below Wall Street expectations due to higher-than-expected costs. The culprit? About 76 million euros in employment taxes tied to the 106% increase in the company's share price over the past year. Spotify said those so-called social charges were about 58 million euros above forecast. Operating metrics for the company continue to look strong. Spotify's average revenue per user for its subscription businesses was up 4% to 4.73 euros, fueled by price increases. And ad-supported revenue was up 8%. Overall gross margin came in at 31.6%, up 400 basis points from a year ago. The strong profitability helped Spotify more than double free cash flow in the quarter to 534 million euros. ## Immediate Market Reaction The earnings miss appears to be weighing on investors in early morning trading. Share prices of Spotify were down 6% following the release of earnings but ahead of the open of regular trading on the New York Stock Exchange. ## What to Watch Spotify turned a lot of heads in 2024 when it was able to use the benefits of its massive scale and pricing power to generate its first full year of profitability. The company said it was watching "headwinds," including a potential slowdown in consumer spending and volatile foreign currency exchange rates, but still sees continued growth in 2025. The company expects total users to grow to 689 million in the current quarter, which is slightly below Wall Street expectations, but for premium subscribers to grow to 273 million, which would be slightly better than what analysts expected. The bull case from here is that Spotify has a sticky product and is a relatively affordable "splurge" when times are tough. Spotify's quarter, despite the tax-related turbulence, provided no reason to worry that the bull case is in doubt. ## Helpful Resources - Full earnings report - Investor relations page ### Related Stocks - [SPOT.US - Spotify](https://longbridge.com/en/quote/SPOT.US.md) - [SLDB.US - Solid Biosciences](https://longbridge.com/en/quote/SLDB.US.md) ## Related News & Research | Title | Description | URL | |-------|-------------|-----| | 新增用户数创纪录、利润增长 200%！“线上音乐巨头” Spotify“成功涨价” | Spotify 第四季度财报显示，得益于涨价策略的成功执行，公司净利润同比激增两倍至 11.7 亿欧元，每股收益远超市场预期。同时，月活跃用户数创纪录地增加了 3800 万，达到 7.51 亿，证明了用户对价格调整的接受度。受此提振，公司股 | [Link](https://longbridge.com/en/news/275526865.md) | | Fortis Group Advisors LLC 减少了其在 Spotify Technology $SPOT 的持股 | Fortis Group Advisors LLC 在第三季度减少了对 Spotify Technology (NYSE:SPOT) 的持股，降幅为 55.2%，目前持有 2,122 股，价值 139 万美元。其他机构投资者，包括 Stat | [Link](https://longbridge.com/en/news/276231861.md) | | 沃尔玛四季度财报超预期但盈利指引不及预期，CEO 称 “美国低收入家庭只能勉强维持生计” | 沃尔玛 Q4 营收超预期，新财年盈利指引（每股 2.75-2.85 美元）远低于市场预期的 2.96 美元，显示通胀压力下消费者支出不确定性犹存，拖累股价下跌 1.38%。财报印证 K 型” 分化：高收入家庭驱动增长，低收入群体 “钱包吃紧 | [Link](https://longbridge.com/en/news/276398633.md) | | 谷歌突然发布 Gemini 3.1 Pro：核心推理性能直接翻倍 | 谷歌发布了最新的大模型 Gemini 3.1 Pro，其推理性能较去年发布的 Gemini 3 Pro 翻倍。在 ARC-AGI-2 评测中，Gemini 3.1 Pro 得分 77.1%，显示出强大的推理能力。新模型支持多源数据综合和复杂 | [Link](https://longbridge.com/en/news/276396515.md) | | 学习英伟达刺激芯片销售，AMD 为 “AI 云” 借款做担保 | AMD 为扩大市场份额祭出金融 “狠招”！为初创公司 Crusoe 的 3 亿美元购芯贷款提供担保，承诺在其无客户时 “兜底” 租用芯片。这一复刻英伟达 “租卡云” 路径的策略虽能短期推高销量，但也令 AMD 在 AI 需求放缓时面临更大的 | [Link](https://longbridge.com/en/news/276401504.md) | --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.