Spotify Streaming Strong in Q2 2025 with 12% Subscriber Boost

Spotify, the streaming giant, saw its paid subscriber base rise 12% year-on-year to reach 276 million, while MAUs grew 11% to 696 million, with the total business revenue increasing by 10%.

By Minal Jain 07 Aug 2025 in Business

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Spotify reported a strong second-quarter performance in 2025, with Premium subscribers up 12% year-on-year to 276 million, topping guidance by about 3 million, and Monthly Active Users (MAUs) increasing 11% to 696 million.

Overall revenue in the quarter grew 10% to around €4.19 billion (or $4.75 billion), although on a constant currency basis, growth reached closer to 15%—meaning currency headwinds took about 4–5 percentage points off reported numbers.

Spotify's gross margin grew 227 basis points to 31.5% due to enhanced efficiency in both Premium and Ad-Supported segments, particularly from podcast monetization enhancements. Operating income was €406 million, which fell short of expectations partly due to higher "social charges" and personnel expenses related to increasing share-based compensation.

Albeit strong top-line performance, the company recorded a net loss of €86 million (≈$97 million), down from €274 million profit in the prior-year period. This was primarily due to a stunning €447 million in finance expenses, related to fair value changes on €1.9 billion of Exchangeable Notes that were reclassified to current liabilities.

On the positive side, Spotify realized a record free cash flow of approximately €700 million in Q2, and €2.8 billion over the last twelve months, leading the board to increase its authorization to buy back shares to $2 billion.

Looking forward, the company projects to achieve 281 million Premium subscribers and 710 million MAUs by the end of Q3, with net operating income of €485 million and revenue of approximately €4.2 billion — both modest compared to street estimates.

Takeaway

Spotify maintains a solid pace of user growth and margin expansion, although bottom-line profitability is still subdued as a consequence of volatility in finances and procedures. Subscriber traction reflects strength in execution—but investors might keep a close eye on debt-related exposures and ad segment performance in the next quarters.

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