Spotify’s Q2 Results: Subscribers Up, Profits Down

Spotify’s Q2 results tell several different stories, with strong subscriber growth offset by increased costs and expenses to deliver a net Q2 loss.

Dig deeper:

• Spotify Premium subscribers climbed 12% YOY to 276 million (up 8 million quarter-over-quarter), and monthly active users (MAU) surged by 11% YOY to 696 million (up 18 million quarter-over-quarter).

• The streamer generated $4.8 billion/€4.2 billion total revenue during Q2, a 10% rise YOY but flat from Q1 2025 and below Spotify’s guidance for Q2.

• Operating expenses grew 8% YOY to $1.1 billion/€914 million, largely due to “increased personnel and related costs, professional services and marketing spend,” as per Variety.

• Net finance costs for Q2 2025 were €358 million, compared with net finance income of €4 million a year earlier.

• Operating income was $468.6 million/€406 million, up from Q2 2024 but down from Q1 2025.

Profit and loss:

• All up, Spotify posted a net loss of $99.2 million/€86 million in the June 2025 quarter, down from the net income of $259.5 million/€225 million for Q1.

• As per Music Business Worldwide, the net loss is due to “high finance costs of €447 million ($507 million),” income tax expenses of €134 million ($152 million) and “Social Charges,” which are the payroll taxes in certain countries that are “tied to the value of employee share-based compensation.”

• Said charges have skyrocketed as Spotify’s stock price has more than doubled over the past 12 months.

Ad issues:

• In the earnings call, CEO Daniel Ek highlighted the underwhelming performance of Spotify’s ad business, which achieved 8% quarterly revenue growth and a 1% YOY decrease.

• “It’s really an execution challenge, not a problem with strategy,” he said.

Q3 Projections:

• Ek warned that the company’s Q3 profits could be a little lower than expected.

• As per Variety, the company anticipates total revenue of $4.8 billion/€4.2 billion (up from €4.0 billion a year prior), but below analyst expectations of €4.47 billion for the period.

• It also forecast Q3 paid subscribers of 281 million and total MAUs of 710 million; a gross margin of 31.1%; and operating income of $550 million/€485 million, below analyst estimates of around €560 million.

Share drop:

• On the back of the Q3 predictions shares dropped as much as 12%.

What they said:

• Daniel Ek: “By constantly evolving, we create more and more value for the almost 700 million people using our platform. 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.”