Spotify Q2 Earnings: Record Gross Margin, 300M Subscribers, and Upbeat Q3 Guidance
SPOT is trading near its 52-week low of $405 (14% above the low).
Summary
Spotify posted Q2 revenue of €4.8B, a record gross margin of 33.4%, and operating income of €655M, all beating guidance. Premium subscribers hit 300M, and Q3 guidance calls for €5.0B in revenue and €670M in operating income.
Key Events · Earnings and Guidance · SPOT
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Q2 Revenue and Profit Beat
Total revenue of €4.8B grew 14% Y/Y (15% constant currency), with operating income of €655M exceeding guidance of €630M. Gross margin hit a record 33.4%, up 193 bps Y/Y.
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Subscriber Milestone
Premium subscribers reached 300 million, up 9% Y/Y, with 7 million net adds in Q2. MAUs grew 12% Y/Y to 777 million.
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Q3 Guidance Above Consensus
Q3 revenue guidance of €5.0B implies accelerating growth, with operating income of €670M. MAUs expected at 788M and Premium subscribers at 305M.
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Strong Free Cash Flow and Buybacks
Free cash flow was €797M in Q2, bringing LTM FCF to €3.3B. The company repurchased $662M in shares YTD, up 30% from 2025 levels.
Analysis · SPOT · Technology
A strong second quarter saw Spotify reach 300 million Premium subscribers and a record 33.4% gross margin. Revenue climbed 14% to €4.8 billion, while operating income of €655 million surpassed guidance. Looking ahead, the company guided third-quarter revenue to €5.0 billion—above consensus—with operating income of €670 million. Free cash flow remained robust at €797 million for the quarter, and the buyback program continued with $662 million repurchased year-to-date. These results reinforce a narrative of accelerating growth and expanding profitability, even as the company reinvests in marketing and AI.
At the time of this filing, SPOT was trading at $461.80 on NYSE in the Technology sector, with a market capitalization of approximately $100.1B. The 52-week trading range was $405.00 to $748.30. This filing was assessed with positive market sentiment and an importance score of 8 out of 10.