Spotify Technology (SPOT) investor relations material

Executive summary

• Revenue grew 15% year-over-year on a constant currency basis to €4.8 billion, with gross margin reaching a record 33.4% and operating income of €655 million.

• Premium subscribers surpassed 300 million, up 9% year-over-year, and total MAUs reached 777 million, up 12%, with strong performance in Europe and North America.

• Free cash flow strengthened to €797 million in Q2, supporting a robust liquidity position of €9.4 billion in cash and equivalents.

• Strategic focus on product optimization, monetization in emerging markets, and ongoing investments in AI and new product verticals.

• Launched new features including Reserved ticketing, Personal Podcasts, and expanded DJ languages.

Financial highlights

• Total revenue was €4.8 billion, up 15% year-over-year; Premium revenue rose 16% year-over-year, driven by 9% subscriber growth and 7.4% ARPU expansion.

• Gross margin expanded by 193 basis points year-over-year to 33.4%, surpassing guidance.

• Operating income reached €655 million, 13.7% margin, €25 million above guidance.

• Free cash flow for the quarter was €797 million; €3.3 billion generated in the last twelve months.

• Net income for the quarter was €545 million, with diluted EPS of €2.61.

Outlook and guidance

• Q3 guidance: MAU of 788 million (+11 million), Premium subscribers of 305 million (+5 million), and total revenue of ~€5 billion (+14%).

• Q3 gross margin forecasted at 32.9%, 130 basis points above prior year.

• Operating income guidance for Q3 is €670 million, with elevated operating expenses due to marketing and AI investments.

• Expect continued improvement in gross and operating margins and meaningful free cash flow growth in 2026.

• Guidance incorporates €9 million in Social Charges based on Q2 share price.