Spotify reports strong Q1 revenue growth

Spotify on Wednesday reported strong Q1 revenue growth, fueled by positive subscriber additions and strong ad sales, as well as lowered headwinds from foreign exchange rates.

The big picture: The Swedish tech giant noted that increased subscriber growth and user engagement can be attributed in part to the better-than-expected performance of "The Joe Rogan Experience," a podcast it acquired exclusively for over $100 million.

• Spotify came under fire Tuesday for anti-vaccination comments made by Joe Rogan, the host of the podcast. Rogan has long been considered one of the top podcasters in the world, but his brash personality has at times caused Spotify content moderation headaches.

By the numbers:

• Revenue increased 16% year-over-year to €2.147 billion for the quarter ending on March 31, exceeding analyst expectations.
• User growth: Spotify added 11 million monthly active users (DAUs), bringing its total active user based to 356 million globally.
• Subscriber growth: The company added 4 million subscribers to its premium plan, bringing its paid subscriber count to over 158 million globally.

The big picture: Podcasting continues to be a point of growth for the company, although Spotify concedes that the revenue it's making from podcasts — while strong — is being offset by slightly higher costs, weighing on its gross margins.

• Spotify says that by Q1's end, it had 2.6 million podcasts on the platform, up from more than 2.2 million podcasts by the end of Q4 2020 and 700,000 in Q4 2019.
• On Tuesday, Spotify launched a new subscription podcast platform that gives creators the ability to create podcasts exclusively for paid subscribers on and off Spotify.

What's next: The company says it expects to hit at least 402 million monthly active users and at least 172 million premium subscribers by year's end.