Audio streaming giant Spotify posted second-quarter subscriber gains to end June with 276 million paying premium subscribers, up from 268 million as of the end of the first quarter in March. Monthly active users (MAUs) grew to 696 million from 678 million. Management had previously forecast 273 million premium subs and 689 million MAUs.
“In the first half of 2025, subscriber net additions grew more than 30 percent compared to the first half of 2024, and this marks the company’s second-highest second quarter for MAU net additions,” Spotify said on Tuesday. MAUs were driven by “growth across all regions, with outperformance led by Rest of the World, Latin America and Europe.”
However, in its latest earnings report, the company also posted a quarterly loss rather than a predicted profit, which had been expected given that the company has been boosting its bottom line with price increases, cost reductions, and a recent pullback from exclusive podcast deals in favor of non-exclusive pacts (case in point: Joe Rogan).
But the firm reported a swing from a €274 million year-ago profit to a second-quarter loss of €86 million ($100 million), or 42 euro cents per share, as its operating expenses rose 8 percent to €914 million ($1.06 billion). Drivers of the profit hit were increased personnel, professional services and marketing costs, as well as what the company calls “social charges,” meaning payroll taxes that go up with the firm’s stock price. As such, Spotify was the victim of its recent share gains.
Spotify shares fell in Tuesday pre-market trading.
Spotify’s second-quarter revenue jumped 10 percent to €4.19 billion ($4.85 billion), led by a 12 percent gain in premium revenue. Advertising-supported revenue, seen as a growth opportunity, dropped slightly.
Spotify CEO Daniel Ek touted growth initiatives on Tuesday after cautious near-term guidance during the first-quarter update. “The short term may bring some noise,” he had said back then. “But we remain confident in the long-term story, and the direction we’re heading in feels clearer than ever.”
On Tuesday, he said: “People come to Spotify and they stay on Spotify. 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.”
For the current third quarter, Spotify projected that its MAUs would grow to 710 million, with premium subscribers reaching 281 million.
Spotify’s stock recently hit an all-time high of $785.00, giving the company a market value of around $160 billion, amid investor optimism in the company’s outlook before a drop in recent days.
Evercore ISI analyst Mark Mahaney used the headline “Will The Record Skip?” for his earnings preview, highlighting such financial risks as a negative foreign-exchange impact from the weakening U.S. dollar, given that Spotify reports its financials in euros, and “material social charges given the run-up in shares.” He maintained his “outperform” rating and $750 stock price target on Spotify.
But Bernstein analyst Ian Moore recently reiterated his “outperform” rating with a higher $840 stock price target, citing “underappreciated pricing power and superfan upside.” He concluded: “While we expect foreign exchange to weigh moderately on premium average revenue per user and top-line growth versus guidance and expectations in the quarter and for the remainder of the year, user metrics and tailwinds from price increases should deliver.”
Netflix last week unveiled a promotional deal with Spotify for the video streaming giant’s Adam Sandler film Happy Gilmore 2. As a result, Spotify users are able to play an interactive audio-visual game called the Happy Gilmore 2 Tournament, which allows them to, by tilting their phones, chip golf balls, navigate moments from the movie, and unlock audio clips.
