Spotify head Daniel Ek, whose company experienced a stock-price slip following its Q2 2025 earnings release. Photo Credit: Magnus Höij / CC by 2.0
After posting solid MAUs growth – along with a net loss – for Q2 2025, Spotify has seen its stock price plummet by about 12% on the day.
In the appropriate earnings report, Spotify disclosed an average of 696 million MAUs, including 276 million paid subscribers. Both figures represent double-digit YoY improvements and exceeded guidance.
And in keeping with a long-running trend, regions besides Europe and North America now account for 57% of MAUs (up 2% from Q2 2024). Nevertheless, subscriptions remain heavily concentrated in developed markets – to the tune of a 37% share for Europe (102 million) and 25% for North America (69 million).
Shifting to straight revenue, Spotify generated $4.8 billion/€4.2 billion during the second quarter, up 10% YoY but flat from Q1 2025 and missing guidance.
As usual, the lion’s share of the sum came from paid listening ($4.3 billion/€3.7 billion, up 12% YoY). Despite the service’s much-discussed ad-supported expansion, the category turned in 8% quarterly revenue growth as well as a 1% YoY decrease.
“However,” CEO Daniel Ek elaborated during the earnings call, “as I look at our progress, the one area that hasn’t yet met our expectations is our ads business. We’ve simply been moving too slowly, and it’s taking longer than expected to see the improvements we initiated to take hold. It’s really an execution challenge, not a problem with the strategy.”
(Chief business officer Alex Norström elaborated on this execution challenge in remarks of his own, disclosing that the platform had “grown monthly active advertisers by more than 40% year over year.” Plus, global advertising head Lee Brown just recently exited Spotify and joined DoorDash.)
Ek also acknowledged that elements of his company’s Q3 forecast – 14 million anticipated MAU additions, five million net new subs therein, and essentially flat revenue of $4.8 billion/€4.2 billion – could be “a little bit lighter than you may have anticipated.”
But in more words, the video-minded exec emphasized a commitment to pursuing long-term commercial growth as opposed to prioritizing quarterly results.
Back to the actual Q2 financials, operating expenses swelled 8% YoY to $1.1 billion/€914 million, with operating income, at $468.6 million/€406 million, jumping from Q2 2024 but declining from 2025’s opening quarter.
More pressingly, Spotify posted a net loss of $99.2 million/€86 million, down from net income of $259.5 million/€225 million for Q1. As many know, SPOT’s ascent into the stratosphere essentially began when management paused a rapid-fire acquisition strategy and began pursuing profitability in earnest.
Bearing as much in mind, SPOT was hovering around $650 – down from just over $700 when the market closed yesterday – during early trading. At the time of writing, that price had fallen to about $630, reflecting the initially highlighted 12% valuation reduction. In any event, SPOT is still up an astonishing 90% from the same point in 2024.
Regarding other noteworthy takeaways, Spotify has bolstered its existing $1 billion stock-buyback program; the company can now repurchase up to $1.9 billion worth of shares by April 21st, 2026.
Lastly, execs provided little additional info about the long-rumored (but evidently delayed) superfan tier, which had previously been expected to launch sometime during 2025.
“And in music, of course, you know, we’re reliant on our partners to a certain degree. But you have to know that superfans are everywhere and not just in music,” said Norström, proceeding to tout an audiobook offering geared towards diehard users.
Content shared from www.digitalmusicnews.com.