Spotify’s Q2 2025 earnings are a classic mixed bag. On one hand, the platform posted stronger-than-expected subscriber and MAU growth. On the other hand, it missed on both revenue and profit, despite earlier guidance suggesting the company had turned a financial corner.
Let’s start with what worked.
Spotify ended the quarter with 276 million Premium subscribers, up 8 million from Q1 and ahead of the forecasted 273 million. Monthly active users reached 696 million, beating the 689 million target. The company emphasized that subscriber additions in H1 2025 were up 30% year-over-year, and Q2 was the second-highest ever for net MAU additions. Growth was broad-based, with Latin America, Europe, and “Rest of World” leading the gains.
But that momentum didn’t carry over to Spotify’s bottom line.
Revenue rose 10% to €4.2 billion, and gross margin improved to 31.5%, but both fell short of guidance. More significantly, Spotify swung from a €274 million profit a year ago to an €86 million net loss this quarter. Operating expenses rose 8%, driven by higher payroll, marketing, and professional services. The company also cited “social charges” tied to the rising stock price, a reminder that equity compensation becomes more expensive when shares rally.
The contrast is stark: record engagement, strong user growth, and meaningful margin improvement, yet profitability remains elusive.
That disconnect hit the stock. Shares dipped in pre-market trading after climbing to an all-time high of $785, fueled by bullish analyst calls and optimism around pricing power. Notably, advertising revenue, still a strategic growth area, declined slightly. That’s not ideal, especially as Spotify diversifies away from its exclusive podcast bet and into non-exclusive models.
Looking ahead, Spotify expects Q3 revenue of €4.2 billion, 281 million Premium subs, and 710 million MAUs. The company is projecting €485 million in operating income, signalling confidence in its cost structure, despite Q2 results raising fresh questions.
Spotify now hosts 7 million podcasts, 430,000 video podcast shows, and offers more than 350,000 audiobooks for a la carte purchase. Headcount stands at 7,309 — a modest increase from late 2024, but still far below 2023’s peak of over 9,100 employees.
CEO Daniel Ek struck an optimistic tone, framing the platform’s evolution as value-creating not just for users, but for the broader ecosystem of music, podcasts, and audiobooks. That may be true in the long run, but Q2 proved that for now, growth comes at a cost.
