Spotify Surges Previous 276 Million Paying Clients However Misses on Q2 Gross sales Estimates

Spotify within the second quarter simply topped Wall Avenue’s expectations on one metric, by including eight million paying prospects — pushing it to 276 million so-called premium prospects total — however the music and podcast streaming firm’s inventory value took an enormous hit in pre-market buying and selling on Tuesday morning after it failed to satisfy different analyst projections for each gross sales and earnings.

The Stockholm-based firm’s inventory value dropped 6% to about $660 per share in pre-market buying and selling on Tuesday, minutes after Spotify reported €4.19 billion, or $4.85 billion, in second quarter income — or about $150 million lower than what analysts had been on the lookout for.

One other a part of Spotify’s report that jumped out: the corporate reported a lack of €0.42 per share, or about $0.49 per share, whereas analysts had anticipated €1.97 earnings per share. That translated to a lack of about $100 million for the second quarter.

The quarterly loss comes after Spotify posted a wholesome revenue within the first quarter of 2025 and was coming off of its first full-year revenue in 2024.

On the intense aspect for Spotify, it added three million extra premium subscribers than analysts had projected for second quarter. “Spotify Premium” prices $11.99 monthly for the person plan within the U.S., in keeping with Spotify. Different plans embody “Premium Duo” at $16.99/month, “Premium Household” at $19.99/month, and “Premium Pupil” at $5.99/month.

And Spotify additionally reported wholesome progress amongst its free memberships as properly, with the corporate including 18 million month-to-month customers through the second quarter. That was up 12% year-over-year and helped Spotify finish the quarter with 696 million international customers.

“Folks come to Spotify and so they keep on Spotify. By continually evolving, we create an increasing number of worth for the just about 700 million individuals utilizing our platform,” Spotify CEO Daniel Ek mentioned in an announcement. “This worth not solely advantages customers but it surely’s attracting extra individuals to streaming and because of this, it’s additionally boosted the industries of music, podcasts, and audiobooks.”

Listed below are among the key outcomes:

Income: Spotify reported €4.19 billion in second quarter income, or $4.85 billion, up 10% from final yr. Analysts had projected Spotify would report €4.27 billion in gross sales, and the corporate final quarter had estimated it might report €4.30 billion.

Promoting income dropped 1% year-over-year to €453 million. The corporate pointed to “softness in pricing and optimization of our podcasting stock” as a cause for the slight dip in advert gross sales.

Subscribers: Spotify added eight million Premium subscribers between April and June, surpassing the 5 million subscribers Wall Avenue was on the lookout for. The corporate ended the quarter with 276 million Premium prospects, up 12% year-over-year.

Spotify mentioned in its report there was not one market to level to specifically for its sturdy quarterly progress. The slice of Spotify’s Premium memberships that come from Latin America and the “Remainder of World” sector — excluding the U.S., Canada, and Europe, basically — was 37%, up from 35% a yr in the past.

Earnings Per Share: The streaming firm reported a lack of €0.42 per share, whereas analysts had been on the lookout for €1.97 EPS. The loss stands out, contemplating Spotify reported €1.07 EPS final quarter and €1.33 EPS throughout the identical quarter a yr in the past.

A good simpler manner to take a look at it: Spotify misplaced $100 million after reporting a revenue of almost $275 million through the second quarter of 2024.

Spotify, in its report, pointed to “increased prices related to personnel and associated, skilled providers and advertising and marketing.”

Month-to-month Customers: There have been 696 million month-to-month Spotify customers on the finish of June, up 18 million from the primary quarter. The 18 million new customers was six instances greater than the three million month-to-month customers Spotify added within the first quarter; Spotify reported a company-record 35 million month-to-month customers joined the service through the ultimate three months of 2024.

Spotify, even with a latest dip, had been white sizzling on Wall Avenue heading into Tuesday, with its share value growing 53% because the begin of 2025.

Notably, Spotify didn’t point out synthetic intelligence in its report, apart from saying the “use of synthetic intelligence” might have an effect on its enterprise within the small print of its Ahead Wanting Statements part.

Spotify additionally didn’t speak a lot about its continued push into podcasts — and specifically, video podcasts — in its second quarter report.

As TheWrap reported in AprilSpotify’s inside knowledge discovered almost two-thirds of subscribers choose podcasts with video, which helped spur the corporate to launch its “Spotify Companions Program” earlier this yr, giving creators extra instruments to create and monetize video podcasts. For podcasters, the massive draw is that Spotify will now pay them an undisclosed slice of additional cash, primarily based on what number of Premium subscribers watch their present.

By the early a part of the second quarter, Spotify had 330,000 video podcasts on its platform — greater than triple the quantity it had two years earlier.

Firm executives will focus on Spotify’s Q2 report on a name at 5:00 a.m. PT.