Key Highlights

● Premium subscribers reached 300 million, up 9% year on year.

● Monthly active users rose 12% to 777 million.

● Revenue was €4,777 million, up 14%, with operating income of €655 million.

● Third-quarter guidance targets 305 million Premium subscribers and €5.0 billion revenue.

Passing 300 million subscribers

Spotify Technology S.A. (NYSE:SPOT) published its second-quarter 2026 results on 4 August 2026, reporting 300 million Premium subscribers, up 9% year on year and 7 million higher than in the previous quarter. Monthly active users rose 12% to 777 million. The company attributed subscriber growth to gains across all regions and strong intake from global promotional campaigns, and it said a 20th-anniversary in-app experience produced its biggest single day of subscriber intake. Co-chief executive Alex Norström said the company has a scale that few companies in history have reached, while fellow co-chief executive Gustav Söderström said Spotify is still in the very early stages of what is possible.

Business and sector position

Spotify operates an audio streaming service for music, podcasts and audiobooks, offering a free advertising-supported tier and paid Premium subscriptions. It reports in euros and generates most revenue from subscriptions, with advertising a smaller contribution. Competition comes from other streaming platforms, from video and social services that capture listening time, and from the major music rights holders on whom the service depends for content and licensing terms. Premium subscribers were split by region as 36% in Europe, 25% in North America, 24% in Latin America and 15% in the rest of the world, which shows a broad geographic base.

What the latest report showed

Revenue was €4,777 million, up 14%, or 15% at constant currency. Premium revenue was €4,331 million, up 15%, while ad-supported revenue was €446 million, up 1%. Premium subscribers beat the company's guidance by 1 million, while monthly active users were 1 million short of its forecast. Premium average revenue per user was €4.89, up 7.4% at constant currency, which the company linked to price increases partly offset by product and market mix. Cash, restricted cash and short-term investments were €9.4 billion, including cash and cash equivalents of €5,938 million.

Financial performance and context

Gross margin was 33.4%, up 193 basis points, with gross profit of €1,596 million. Operating income was €655 million, up 61% from €406 million, a margin of 13.7%. Net income attributable to owners was €545 million, or €2.61 per diluted share, compared with a loss of €86 million a year earlier. Social charges, which relate to share-based pay and move with the share price, were €1 million, against €115 million a year earlier. Free cash flow was €797 million. Trailing twelve-month free cash flow was €3.3 billion, and free cash flow rose 14% from €700 million a year earlier. Spotify repurchased $662 million of shares in 2026 up to 3 August, a 30% increase on the equivalent 2025 level. Third-quarter guidance assumes a foreign-exchange tailwind of 200 basis points.

Risks and uncertainties

Net income and operating income can be influenced by social charges, so year-on-year comparisons are affected by items that are unrelated to the underlying business. Subscriber growth depends on promotions and price rises being accepted by consumers, and licensing costs, regulation and currency movements remain constant uncertainties. Gross margin is guided lower in the next quarter. The company has also said it will keep a high bar for investment. Ad-supported revenue grew only 1% as reported, so reliance on subscriptions is high.

Subscriber targets for the third quarter

For the third quarter, Spotify guides to 788 million monthly active users, 305 million Premium subscribers, revenue of €5.0 billion, gross margin of 32.9% and operating income of €670 million. Readers should watch whether subscriber additions continue at roughly five million, how pricing affects average revenue per user, how advertising revenue develops against the 1% reported growth, and progress with new features such as the Reserved ticketing offer launched in the United States with Live Nation (NYSE:LYV).