Spotify Hits 276M Paying Subs, But Swings to Q-Loss

Spotify Technology SA reported its second-quarter 2025 earnings, revealing strong subscriber growth but a shift to a financial loss, missing profit expectations.

Spotify ended Q2 2025 with 276 million paying premium subscribers, up 12% year-over-year (YoY) from 268 million in Q1 2025, surpassing its own forecast of 273 million.
Monthly active users (MAUs) grew 11% YoY to 696 million, exceeding the company’s guidance of 689 million. This marked Spotify’s second-highest Q2 for MAU net additions, driven by growth in Latin America, Europe, and the Rest of the World regions.

The company added 8 million premium subscribers and 18 million MAUs in the quarter, with subscriber net additions up over 30% in the first half of 2025 compared to the same period in 2024.

However, Spotify reported a net loss of €86 million ($100 million), or €0.42 per share, a significant swing from a €274 million profit in the year-ago quarter. Analysts had expected a profit of €1.97 per share.

Revenue grew 10% YoY to €4.19 billion ($4.8 billion), but fell short of Wall Street’s estimate of €4.27 billion, partly due to foreign exchange (FX) headwinds from a weakening U.S. dollar, as Spotify reports in euros.

Premium subscription revenue rose 12% YoY to €3.74 billion, driven by subscriber growth and price increases. However, advertising-supported revenue saw a slight decline, despite being viewed as a growth opportunity.

The loss was attributed to higher expenses, including €115 million in social charges (payroll taxes tied to stock-based compensation, exacerbated by a rising share price), as well as increased personnel, professional services, and marketing costs.

CEO Daniel Ek highlighted strong user engagement and retention, crediting product enhancements like AI-powered playlists (expanded to 40+ markets), voice requests for Spotify’s AI DJ, and a new Upcoming Releases hub for pre-saving music and accessing merchandise.

Spotify’s shift from exclusive to non-exclusive podcast deals (e.g., Joe Rogan) and cost-cutting measures have supported profitability efforts, though these were overshadowed by the unexpected loss.
Free cash flow reached a record €700 million, up from €206 million a year earlier, providing resources for further content and technology investments.