Spotify's Q2 Results Miss Analyst Estimates, Revenue Outlook Falls Short

Spotify Technology reported a Q2 loss of 48 cents per share, missing the analyst consensus estimate of a $2.11 profit. Revenue of $4.75 billion marked a 10% YoY increase but fell short of the $4.84 billion analyst projection. The company forecasts Q3 2025 revenue of $4.95 billion, below the analyst consensus of $5.15 billion. Analysts such as Rosenblatt, Keybanc, Benchmark, and Bank of America Securities maintained their ratings but lowered price targets.

Spotify Technology (SPOT) reported a second-quarter loss of 48 cents per share, missing analyst consensus estimates of a $2.11 profit. The company's revenue of $4.75 billion marked a 10% year-over-year increase but fell short of the $4.84 billion analyst projection. Spotify expects Q3 2025 revenue of $4.95 billion, which is below the analyst consensus of $5.15 billion. Analysts from Rosenblatt, Keybanc, Benchmark, and Bank of America Securities maintained their ratings but lowered price targets.

The results follow a remarkable 120% rally over the past year, driven by a sweeping business overhaul that included price hikes, layoffs, and a retreat from costly podcast exclusivity deals. However, the company faced challenges in its ads business and saw gross margins slip to 31.5% in Q2 from 32.2% in Q4 2024. Spotify expects margins to slip further to 31.1% in Q3.

Spotify's CEO Daniel Ek acknowledged the near-term weakness but reaffirmed his confidence in the company's long-term trajectory. He attributed recent user and subscriber growth to long-term initiatives launched quarters or even years ago. "Our approach has always been and will continue to be the focus on creating lifetime value rather than optimizing for quarter-to-quarter performance," Ek told investors.

Despite the setbacks, Spotify guided to a third-quarter monthly active user (MAU) count of 710 million, ahead of the 707 million analysts expected. Premium subscribers grew 12% to 276 million, while ad-supported users increased 10% to 433 million, both topping forecasts.

The company's stock closed nearly 12% lower on Tuesday after the earnings report, trading closer to $620 at Tuesday's close. The stock hit an all-time high of $738.45 earlier this month.

[1] https://finance.yahoo.com/news/spotify-stock-slides-after-reporting-q2-loss-weaker-forecast-after-record-rally-134534543.html
[2] https://www.nasdaq.com/articles/exponent-expo-q2-revenue-rises-1