Spotify Technology (SPOT) Q2 2025 earnings summary

Executive summary

• Achieved strong user and subscriber growth, with 696 million MAUs and over 100 million subscribers in Europe, exceeding guidance by 7 million; Premium Subscribers grew 12% year-over-year to 276 million.

• Revenue grew 15% year-over-year on a constant currency basis to €4.2 billion, but reported revenue was impacted by unfavorable currency movements.

• Gross margin expanded to 31.5%, up 230 basis points year-over-year, with operating income at €406 million, below guidance due to higher social charges and payroll expenses.

• Free Cash Flow reached a Q2 record of €700 million, with cash and short-term investments at €8.4 billion.

• Net loss for Q2 2025 was €86 million, mainly due to higher finance costs from Exchangeable Notes.

Financial highlights

• Q2 2025 revenue: €4.2 billion (+15% YoY constant currency, +10% reported); Premium revenue: €3,740 million (+12% YoY); Ad-Supported revenue: €453 million (-1% YoY, +5% constant currency).

• Gross profit: €1,320 million (+19% YoY); gross margin: 31.5% (up 230 bps YoY).

• Operating income: €406 million (9.7% margin), up 53% year-over-year but below guidance.

• Free Cash Flow: €700 million in Q2, €1,234 million for H1 2025 (+77% YoY); cash and equivalents at €8.4 billion.

• Q2 2025 net loss: €86 million (vs. €274 million net income in Q2 2024); diluted EPS: (€0.42).

Outlook and guidance

• Q3 2025 guidance: 710 million MAUs (+14 million), 281 million subscribers (+5 million), €4.2 billion revenue, 31.1% gross margin, €485 million operating income.

• Guidance includes a ~490 bps FX headwind, regulatory charges, and €25 million in social charges.

• Full-year 2025 expected to deliver margin expansion and healthy free cash flow growth.

• Management expects continued user and subscriber growth, with ongoing investments in content and product enhancements.