But while revenue grew 26 percent year over year, it also declined 1 percent quarter-over-quarter.
Spotify said paid subscriptions for the second quarter would be in the range of 79 million to 83 million, which at the midpoint was below Wall Street's consensus forecast of 81.79 million, Reuters reports.
The company lost $166 million (£122 million/139 million euros) in the same quarter in 2017.
Investors didn't want to hear it, with shares trading down 9 percent to $153.80 a share in after-hours trading.
It's planning an operating loss of $71 million to $167 million, in part due to a $35 million to $42 million expense related to its direct listing debut on the public markets. After several weeks of relative calm, the company saw its stock price plummet as investors appeared spooked by the results of its first earnings report as a public company. Interestingly, it appears that the cumulative number of paid subscribers on Spotify is growing faster than the cumulative number of active users.
The company will hold a conference call at 5:00 p.m ET to discuss its results. It said that it had 170 million active monthly users at the end of March, up 30 per cent on a year ago.
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As to Spotify's chief competition, Apple Music now boasts more than 40 million paying subscribers. Average revenue per user was Euro 4.72 in Q1, down 14 percent from a year earlier, or 6 percent less excluding currency effects.
"We do not have sufficient confidence that [Spotify] will generate excess returns on capital over the next 10 years", Morningstar analyst Ali Mogharabi wrote.
Interestingly, the MAU count indicates that 4 million of Spotify's 75 million subscribers pay but don't listen.
Last year, subscription-based streaming revenue accounted for 38 percent of all recorded music, up from 29 percent the year before, IFPI said. Excluding forex effects, revenues were up 37 percent, Spotify said.
Spotify said that it saw particularly strong growth for its free service in emerging economies such as Vietnam and Thailand, two markets which the company recently entered.