- Spotify grew total revenue 14% to €4.8 billion on earnings of €2.61 per share.
- Wall Street was expecting revenue of €4.79 billion on earnings of €2.80 per share.
- Shares of the music streaming giant fell over 4% in pre-market trading on Tuesday following the results
Spotify hit a premium subscriber milestone of 300 million globally after adding a total of 7 million in its second quarter, representing 9% growth year over year.
It also added 16 million monthly active users for a total of 777 million, or growth of 12% — coming in slightly below guidance of 17 million additions. Ad-supported MAUs climbed 14% to 494 million.
Total revenue increased 14% to €4.8 billion, which included a 15% increase in premium revenue driven by the subscriber and average revenue per user gains and a 1% bump in ad-supported revenue. Total operating profit grew 61% to €655 million, despite a 3% increase in operating expenses driven by “temporary investments in marketing and cloud/AI spend.” Net income came in at €545 million, or €2.61 per share, compared to a net loss of €86 million, or 42 cents per share, in the year-ago period.
Premium revenue growth outpaced costs net of marketplace programs, audiobooks costs and video podcast costs, while ad-supported revenue gains were driven by “favorable podcast and tax impacts,” which more than offset music costs and other costs of revenue. ARPU growth was driven by price increase benefits, partially offset by its product/market mix.
Automated sales channels remained the largest contributors to overall advertising growth. Music advertising also increased its overall impressions sold, which was offset by pricing softness, while podcast growth was led by sponsorship gains in Spotify’s owned & licensed portfolio.
The latest quarterly results come as Spotify made several new announcements during its Investor Day presentation in May, including creator memberships, Personal Podcasts and its Reserved ticket offering. It also unveiled new higher-hour add-on tiers for the platform’s audiobook option, Family and Student audiobook plans and Studio by Spotify Labs.
Since launching with Live Nation in the U.S., nearly 100,000 tickets have been reserved through Spotify across multiple tours. More than 500 million Spotify users have streamed a video podcast, with consumption up more than 140% since the launch of the company’s Partner Program. In total, the streaming giant has 7 million podcast titles and over 700,000 audio book titles.
In addition, Spotify has reached licensing deals with Universal Music Group and Merlin that enable fans to legally create covers and remixes from participating artists’ and songwriters’ catalogs, with both the original performing artist and songwriter sharing in the value created.
It also expanded its DJ feature to four new languages: French, German, Italian and Brazilian Portuguese. Since its 2023 launch, DJ has delivered a more personalized listening experience to nearly 100 million Premium users, combining tailored music recommendations with AI-generated commentary to drive discovery and deeper artist engagement.
During its second-quarter earnings call, Spotify co-CEO Alex Norström touted “a scale that few companies in history have reached,” and a “healthy and compounding” business.
“Spotify lives across your whole day — the commute, the workout, studying, gaming, the dinner table, and sleep. At our scale, that is rare,” he aded. “Our position gives us an opportunity space as wide as our users want it to be. At the investor day, we told you where Spotify is going, and this quarter we’re building momentum behind that.”
Co-CEO Gustav Söderström added that Spotify is still in the “very early stages of what is possible” and would continue to have a “high bar” for investments as it focuses on better engineering, faster shipping, new products and new ways for users to engage.
“Our job remains the same: understand the technology early and deeply, and turn it into something people love. Creating value for our stakeholders,” he said.
Looking ahead at the third quarter, Spotify said it is well positioned to deliver improved growth and margins in 2026 as we reinvest to support our long-term potential.” The company is forecasting a total of 305 million premium subscribers and 788 million MAUs, operating income of €670 million and revenue of €5 billion.
Spotify shares fell over 4% in pre-market trading on Tuesday following the results.
