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Jun 30
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Spotify Q2 2025 Earnings Report
Spotify reported solid user and revenue growth in Q2 2025, despite posting a net loss due to higher Social Charges.
Key Takeaways
Spotify added more users and subscribers than expected and delivered record free cash flow. However, net income turned negative as share-based compensation increased due to stock appreciation.
Total revenue reached €4.193 billion, up from €3.807 billion a year ago
Free cash flow hit a record €700 million for the quarter
Monthly Active Users grew to 696 million, exceeding guidance
Net loss of €86 million driven by higher-than-expected Social Charges tied to share price
Spotify
Spotify
Spotify Revenue by Segment
Revenue by Segment
Premium Revenue
CapyFin.comAd-Supported Revenue
CapyFin.com Forward Guidance
Spotify expects continued user growth in Q3 2025, along with stable gross margin and improved operating income, but warns of FX headwinds and additional regulatory and social charge costs.
Positive Outlook
- MAUs expected to reach 710 million
- Premium subscribers expected to grow to 281 million
- Operating income forecast at €485 million
- Gross margin projected to hold at 31.1%
- Solid subscriber momentum across all regions
Challenges Ahead
- Forecast assumes ~490 bps FX headwind
- €25 million in expected Social Charges
- Regulatory charge in Premium to impact gross margin by ~40 bps
- Ad-supported revenue faces pricing softness
- Share price volatility may continue to impact costs unpredictably
Revenue & Expenses
Visualization of income flow from segment revenue to net income