Core Insights - Spotify reported strong growth in Q1 2025, with revenue increasing by 16% year-over-year to 4.2 billion euros and premium subscribers rising by 12% to 268 million [2][3] - Despite revenue growth, earnings per share (EPS) of 1.07 euros missed Wall Street expectations due to higher-than-expected employment taxes [4][6] - The company continues to show strong operating metrics, with average revenue per user increasing by 4% to 4.73 euros and overall gross margin improving to 31.6% [5] Financial Performance - Revenue for Q1 2025 was 4.2 billion euros, up from 3.6 billion euros in Q1 2024, reflecting a 16% increase [2] - EPS for Q1 2025 was 1.07 euros, a 10% increase from 0.97 euros in Q1 2024, but fell short of expectations [2][4] - Premium subscribers grew to 268 million, up from 239 million, marking a 12% increase [2][3] - Free cash flow more than doubled to 534 million euros, a 158% increase from the previous year [2][5] Market Reaction - Following the earnings report, Spotify's share price dropped by 6% in early morning trading [6] - The earnings miss due to tax-related costs has raised concerns among investors [6] Future Outlook - Spotify anticipates total users to reach 689 million in the current quarter, slightly below expectations, while premium subscribers are expected to grow to 273 million, slightly above expectations [8] - The company remains optimistic about continued growth in 2025 despite potential headwinds such as consumer spending slowdowns and currency volatility [7][8]