Spotify Strikes a Chord: Big Q1 Gains and Bigger Climate Goals
Spotify, the world’s largest audio streaming platform, recently shared its financial results for the first quarter of 2025. Alongside its business growth, the company continues to make progress on its environmental goals.
This article reviews Spotify’s recent financial performance and highlights its actions to reduce carbon emissions toward net zero and tackle climate change.
Spotify Hits the High Notes in Q1 2025
Spotify delivered solid results in the first three months of 2025. The company’s revenue grew 15% year-over-year, reaching €4.190 billion (~$4.52 billion USD).
Subscription revenue made up most of this amount, rising 16% to €3.771 billion. Meanwhile, ad-supported revenue grew 8% to €419 million. This marks steady growth in both user subscriptions and the advertising business.
The platform now has 678 million monthly active users (MAUs), up 10% from a year ago. Of these, 268 million are premium subscribers, showing a 12% increase. Spotify’s growth is driven by higher user engagement, expanding content offerings, and stronger advertiser demand.
Spotify also saw an improvement in profitability. Its gross margin rose to 31.6%, up from 27.6% last year. The company reported €509 million in operating income, a 203% increase from the previous year. Spotify credited efficiency efforts and lower marketing costs for this positive shift.
Looking ahead, Spotify forecasts MAUs to reach 689 million and premium subscribers to hit 273 million by the end of Q2 2025. The company expects Q2 revenue to be about €4.1 billion (~$4.43 billion USD) and aims for continued margin improvement.
Spotify’s Net Zero and Climate Goals
While Spotify is focused on business growth, it also works to reduce its environmental footprint. The company has set a target to achieve net-zero greenhouse gas (GHG) emissions by 2030. This commitment covers emissions from Spotify’s operations (Scope 1 and 2) and its value chain (Scope 3).
Spotify’s climate strategy has three main parts: reducing emissions, using renewable energy, and supporting carbon removal.
Turning Down the Carbon Volume
Spotify tracks its emissions each year. In 2024, its total GHG emissions were 195,027 metric tons of CO₂ equivalent (MTCO₂e).
About 98% of these emissions came from its value chain — mostly from cloud services, advertising, marketing, and commuting. Only 2% came from direct operations like office energy use.
To reduce emissions, Spotify focuses on:
- Optimizing its use of cloud computing services to lower energy demand
- Reducing the impact of corporate travel and in-person events
- Engaging suppliers to encourage lower-carbon practices
- Improving energy efficiency at offices and data centers
Spotify aims to cut its Scope 1, 2, and 3 emissions by 50% by 2030 compared to a 2020 baseline.
For example, Spotify is working closely with major cloud providers to ensure their data centers use renewable energy. Streaming services rely heavily on data centers, so making this shift is key to cutting overall emissions.
Spotify also encourages advertising and content partners to measure and reduce their own footprints, helping reduce indirect impacts.
Streaming on Sunshine: 100% Renewables
The streaming giant powers 100% of its direct operations with renewable electricity. This means all offices, owned equipment, and data center activities under Spotify’s control use renewable energy. The company buys renewable energy credits (RECs) to match its electricity consumption in all locations.
Spotify also pushes for more renewable energy in the cloud services it uses. For instance, by working with cloud providers that are shifting toward wind and solar power, Spotify ensures that the infrastructure behind music streaming stays green.
In addition to electricity, Spotify continues to assess ways to lower emissions from heating, cooling, and commuting at its offices worldwide. Its goal is to use energy smartly at every level of the business.
Balancing the Beat with Carbon Removal
Even with the best efforts to cut emissions, Spotify knows that some emissions are hard to eliminate. To balance these unavoidable emissions, the company supports high-quality carbon removal projects. This is a key part of Spotify’s strategy of reaching net zero.
The streaming firm has bought verified carbon credits to offset part of its footprint, but it’s now focusing on carbon removals rather than offsets. The company carefully selects carbon removal projects that meet strict standards for durability, transparency, and independent verification.
Spotify invests in a mix of nature-based and technology-based carbon removal methods. The variety of these projects includes reforestation and afforestation projects that plant and maintain forests to absorb CO₂ from the air.
Additionally, Spotify looks for carbon removal projects that bring co-benefits. These include protecting biodiversity, supporting local communities, and improving air and water quality. This aligns with Spotify’s broader values around social impact and equity.
Keeping It Transparent: Reporting and Accountability
Spotify follows leading climate reporting frameworks. It aligns its disclosures with the Greenhouse Gas Protocol and uses third-party verification for its emissions data. The company also reports through CDP (formerly Carbon Disclosure Project) and supports the Science Based Targets initiative (SBTi).
Spotify’s annual Equity and Impact Report shares updates on climate goals, emissions data, and progress on key actions. Transparency is a central part of the company’s sustainability approach.
The Climate Champions Network
Spotify runs an internal Climate Champions network made up of employees who help reduce the company’s impact on the environment. These Climate Champions work in different ways. Some join formal working groups and leadership circles, while others are part of smaller project teams that create and lead grassroots projects.
Their main goal is to encourage their coworkers to make choices that are better for the climate. Climate Champions from different parts of the company meet regularly to share ideas, experiences, and tips that help everyone improve their climate efforts.
Encore: Profits and Planet in Harmony
Spotify acknowledges challenges in reaching net zero. Much of its emissions come from areas it does not directly control, such as cloud providers and advertising partners. Reducing these Scope 3 emissions requires strong collaboration across the value chain.
Another challenge is measuring the emissions tied to users streaming audio content. While user listening itself has a small footprint, the data storage and transfer behind it can be energy-intensive. Spotify is exploring ways to better understand and lower these indirect impacts.
Looking forward, Spotify will continue to:
- Engage suppliers and partners to improve sustainability practices
- Invest in new carbon removal technologies and scale nature-based projects
- Increase renewable energy use throughout its cloud supply chain
- Develop better tools to track and manage emissions from streaming activity
- Share regular updates on progress toward its 2030 net-zero goal
Spotify’s Q1 2025 results show strong financial performance, with rising users, revenue, and profitability. At the same time, the company stays committed to cutting carbon emissions and advancing climate action. By focusing on clean energy, reducing value chain emissions, and supporting carbon removal, Spotify aims to align its business with a sustainable future.
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