Spotify Reports Strong Q1 Growth, Expands into Fitness with Peloton Deal
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Spotify's first-quarter results for 2026 met or exceeded expectations, with subscriber and user growth driving significant increases in revenue and profitability. The company also announced a major expansion into the fitness category by licensing over 1,400 workout videos from Peloton for its Premium subscribers. Looking ahead, Spotify projects continued growth in users, subscribers, and revenue for the second quarter.
Facts First
- Gained 3 million Premium subscribers in Q1, reaching a total of 293 million.
- Total monthly active users grew 12% year-over-year to 761 million, exceeding guidance.
- Operating income surged 40% to €715 million as gross margin expanded.
- Announced entry into the fitness category with a deal to license Peloton workout videos for Premium users.
- Projects Q2 revenue of €4.8 billion and Premium subscribers reaching 299 million.
What Happened
Spotify reported first-quarter 2026 financial results that met or slightly exceeded expectations. The company gained 3 million Premium subscribers, bringing its total to 293 million. Total monthly active users (MAUs) grew 12% year-over-year to 761 million, surpassing prior guidance. Revenue for the quarter was €4.53 billion, an 8% increase. Premium revenue grew by 10%, while ad-supported revenue declined by 5%. Excluding foreign exchange impacts, total revenue increased 15%.
Operating income rose 40% to €715 million, and free cash flow increased 54% to €824 million. The company's gross margin improved to 33.0%, up from 31.6% a year ago. Spotify attributed the margin improvement to revenue growth outpacing costs for music, audiobooks, and video podcasts. Separately, on Monday, Spotify announced its launch into the fitness category, which includes a deal to license more than 1,400 workout videos from Peloton for Premium subscribers.
Why this Matters to You
If you are a Spotify Premium subscriber, you may soon have access to a library of licensed workout videos from Peloton as part of your existing subscription, which could provide added value. The company's third subscription price increase in the U.S. within four years means your monthly cost for the service may have risen, though this has coincided with strong subscriber growth and improved financial performance. The broad-based growth in paid subscriptions, particularly in Latin America and Europe, suggests the platform's global appeal is expanding, which could lead to a more stable and feature-rich service for you.
What's Next
Spotify's outlook for the second quarter of 2026 projects total MAUs will increase to 778 million and Premium subscribers will reach 299 million. The company forecasts total revenue of €4.8 billion, representing a 14.5% increase, and operating income of €630 million. The continued expansion into new content categories like fitness may be a key part of Spotify's strategy to attract and retain subscribers. The leadership transition that began in 2026, with Alex Norström and Gustav Söderström as co-CEOs and Daniel Ek as executive chairman, is likely to continue shaping the company's strategic direction.