Some of the numbers weren't a big surprise, given the company's financial forecast in March, when the company said it expects to hit as many as 96 million subscribers this year. Spotify maintained its outlook for the year on Wednesday, saying it plans to lose up to 330 million euros this year (about $397 million at Wednesday's exchange rate).
But Spotify faces steep expectations for rapid growth, given formidable competition from rivals like Apple and Amazon.
And the company forecast year-over-year growth of 10 percent to 29 percent in the current quarter, which is not a big jump from the 26 percent growth rate it hit during the first three months of the year (some of that can be blamed on foreign exchange rates).
CEO Daniel Ek told analysts on a conference call that he maintained the company's long-term growth plan, including around its "freemium" upgrade program, which boosts user engagement and allows the company to get additional data points for its music personalization services. Executives said they anticipate being in "fast growth mode" for a while, as the company prioritizes market share above profit margins.
In addition to research and development staff, Spotify has invested in several new initiatives, including expansion into Asia and Africa, a new advertising platform, and a new free app. It has also expanded its reach in the podcast market.
Executives said the goal is to make the music industry more efficient and take advantage as radio listeners move online and more people get access to 4G mobile internet.
Deals like family plans and student plans have been a source of strength, reducing the rate that people leave the platform, Spotify said. In that vein, Spotify recently announced a new bundle with video service Hulu. Executives said that price increases aren't a focus for Spotify in the near term, and that desktop advertising is the slowest growth area.
Spotify posted a solid public offering last month, despite the unconventional process, where no banks underwrote the offering and no price was set ahead of the debut.
Rival Apple Music also said last month that it had 40 million paid subscribers, hinting at its fast growth. Last June Apple Music had 27 million paid subscribers, and a year ago Spotify said it had more than 50 million subscribers.
Spotify has emphasized its wide availability — free memberships, compatibility with multiple operating systems and smart speakers — as a competitive advantage. Some analysts have compared Spotify to Netflix, which pays a lot for content but has achieved long-term success.
Spotify executives said there hasn't been meaningful impact from the competition, and that music streaming is not a "winner-take-all" market. The company also said it's not threatened by smart speakers from companies like Amazon, Apple and Google, which also have competing streaming services.
"We believe we're only in the second inning of the Spotify journey," Ek said. "I look forward to sharing our future growth in upcoming quarters."