Spotify easily topped Wall Street’s expectations by adding 8 million premium customers during the second quarter — pushing it to 276 million paying customers overall — but the music and podcast streaming company’s stock price took a big hit on Tuesday morning after it failed to meet analyst projections for both sales and earnings.
The Stockholm-based company’s stock price dropped 6% to about $660 per share in pre-market trading on Tuesday, minutes after Spotify reported €4.19 billion, or $4.85 billion, in Q2 revenue — or about $150 million less than what analysts were looking for.
Another part of Spotify’s report that jumped out: the company reported a loss of €0.42 per share, or about $0.49 per share, while analysts had expected €1.97 earnings per share. That translated to a loss of about $100 million for the second quarter.
On the bright side for Spotify, it added 3 million more premium subscribers than analysts had projected for Q2. And Spotify also reported healthy growth among its free memberships as well, with the company adding 18 million monthly users during the second quarter. That was up 12% year-over-year and helped Spotify end the quarter with 696 million global users.
“People come to Spotify and they stay on Spotify. By constantly evolving, we create more and more value for the almost 700 million people using our platform,” Spotify CEO Daniel Ek said in a statement. “This value not only benefits users but it’s attracting more people to streaming and as a result, it’s also boosted the industries of music, podcasts, and audiobooks.”
Here are some of the key results:
Revenue: Spotify reported €4.19 billion in second quarter revenue, or $4.85 billion, up 10% from last year. Analysts had projected Spotify would report €4.27 billion in sales, and the company last quarter had estimated it would report €4.30 billion.
Advertising revenue dropped 1% year-over-year to €453 million. The company pointed to “softness in pricing and optimization of our podcasting inventory” as a reason for the slight dip in ad sales.
Subscribers: Spotify added 8 million premium subscribers between April and June, surpassing the 5 million subscribers Wall Street was looking for. The company ended the quarter with 276 million premium customers, up 12% year-over-year.
Spotify said in its report there was not one market to point to in particular for its strong quarterly growth. The slice of Spotify’s premium memberships that come from Latin America and the “Rest of World” sector — excluding the U.S., Canada, and Europe, essentially — was 37%, up from 35% a year ago.
Earnings Per Share: The streaming company reported a loss of €0.42 per share, while analysts were looking for €1.97 EPS. The loss stands out, considering Spotify reported €1.07 EPS last quarter and €1.33 EPS during the same quarter a year ago.
An even easier way to look at it: Spotify lost $100 million after reporting a profit of nearly $275 million during the second quarter of 2024.
Spotify, in its report, pointed to “higher costs associated with personnel and related, professional services and marketing.”
Monthly Users: There were 696 million monthly Spotify users at the end of June, up 18 million from the first quarter. The 18 million new users was six times more than the 3 million monthly users Spotify added in Q1; Spotify reported a company-record 35 million monthly users joined the service during the final three months of 2024.
Spotify, even with a recent dip, had been white hot on Wall Street heading into Tuesday, with its share price increasing 53% since the start of 2025.
Notably, Spotify did not mention artificial intelligence in its report, except for saying the “use of artificial intelligence” could affect its business in the small print of its Forward Looking Statements section.
Company executives will discuss Spotify’s Q2 report on a call at 5:00 a.m. PT.
