Spotify Hits Record Q2 Earnings Amid Double-Digit User Growth

In its earnings report released Tuesday (July 23), Spotify showcased a record-breaking second quarter, driven by features in its music offerings such as daylist and AI DJ, alongside expansions into video podcasts and audiobooks. These developments have bolstered user engagement, the company said, reinforcing Spotify’s position as a leading platform in the competitive streaming landscape.

Key financial metrics demonstrated substantial year-over-year increases: Monthly active users (MAUs) climbed by 14% to 626 million, while subscribers grew by 12% to reach 246 million. Total revenue surged by 20%, reaching 3.8 billion euros ($4.1 billion), a feat supported by a gross margin of 29.2% and a notable rise in operating income to 266 million euros ($288.6 million).

“It’s an exciting time at Spotify,” Spotify founder and CEO Daniel Ek said. “We continue to innovate and demonstrate that we are not only a great product but increasingly a great business. We are exceeding our own expectations, which bodes very well for the future.”

In June, Spotify announced a price increase for its Premium service in the U.S., with individual plan fees rising by $1 to $12, Duo plan costs by $2 to $17, and Family plan rates by $3 to $20. Despite these adjustments, the streaming giant attracted 7 million net subscribers during the second quarter. Profits for the quarter surged by 45% year over year to 1.11 billion euros ($1.21 billion), propelled by a 21% increase in Premium revenue to 3.35 billion euros ($3.63 billion), bolstered by subscriber growth and higher average revenue per user (ARPU). Ad-supported revenue also grew by 13% to 456 million euros ($495 million).

Ek highlighted the company’s achievements in a video posted on his LinkedIn page, saying, “The bottom line is we had a really great quarter.” He attributed the firm’s success to ongoing innovations in enhancing product appeal and user retention, pointing to popular features such as daylist.

He also noted the introduction of audiobook Countdown Pages, calling it “a significant innovation that enables authors to generate anticipation for upcoming releases and foster new fan connections in novel ways.”

Ek said Spotify offers value to American consumers. “If you’re in the U.S., you’re now getting over 250,000 audiobooks, over six million podcasts, and nearly all the world’s music for just $11.99,” he said. “People recognize Spotify’s incredible value, and we will continue to build on this.”

Looking ahead, Spotify aims to expand its user base through strategic investments in podcasts and targeted promotional initiatives. Despite fluctuations in monthly active users, the company demonstrated strong subscriber growth and enhanced monetization in established markets, underscoring its resilience and growth trajectory.