Spotify (NYSE: SPOT) reported results for its Q1 performance on Wednesday, where the streaming service saw a 16% increase in total revenue from the previous quarter and a total of 356 million monthly active users and 158 million premium subscribers by the end of Q1. These two figures were up 24% YoY and 21% YoY respectively, overall meeting analyst expectations.
The service's strong focus on the podcast space has also proven fruitful, as the company reported a strong increase in podcast consumption hours, peaking at an all-time high in March.
However, shares fell around 12 percent as the company saw significantly slower user growth in the beginning of 2021 compared to previous quarters, and with continued future uncertainty related to the pandemic, Spotify warned of potentially unpredictable, sluggish performance in the upcoming few months.
Average revenue per user also dropped 7% to $5 per user, and this figure has been decreasing steadily over the past year as Spotify continues to offer promotional discounts on its services as it expands into new countries. The service managed to debut in 86 new countries in the first quarter, and the growth seen in the US, Mexico, Russia, and India managed to offset the slower-than-expected growth in Latin America and Europe.
As a result, the service plans to raise prices for family and student plans in the UK and a few other markets, but the company is hesitant to raise prices in the US, their largest market, saying they plan to "play it very carefully" regarding.