Spotify tanks after posting surprise Q2 loss, weaker-than-expected Q3 outlook

Spotify shares fell over 7% in premarket trading Tuesday after the audio streamer swung to a loss for the second quarter and gave a lighter-than-expected Q3 outlook.

The company reported a loss of 0.42 euros (~$0.49) per share, while Wall Street had expected profit of 1.97 euros (~$2.27) per share. Revenue came in at 4.19 billion euros ($4.8 billion), missing analysts’ estimates of around 4.27 billion euros ($4.9 billion). 

Monthly active users climbed 11% to 696 million, the second-highest Q2 MAU count in the company’s history and beating expectations. Premium subscribers also grew 12% to 276 million, topping Wall Street’s expected 273.4 million and prior company guidance of 273 million. The combination of higher-than-expected users and lower-than-expected sales pushed average revenue per user among premium subscribers lower for the second straight quarter.

That trend seems poised to continue: for Q3, Spotify expects total MAUs to hit 710 million, ahead of the 707 million analysts anticipated. But it’s guiding for revenue of 4.2 billion euros, coming in short of the 4.48 billion euros expected by the Street. Foreign exchange fluctuations — notably, the strength of the euro versus the US dollar to date in 2025, even after yesterday’s massive bout of weakness following the US-EU trade deal — are a big factor behind Spotify’s lackluster revenue outlook.

Spotify has been focused on improving margins and moving toward consistent profitability, but the company took on higher payroll taxes than expected during Q2 as well as a change in its revenue mix.

Spotify shares were up 53% year to date ahead of the report.

“Currency headwinds and underwhelming 3Q gross margin guidance may be disappointing for Spotify, but we believe they are short-term noise that shouldn’t overshadow the tailwinds,” Bloomberg Intelligence senior industry analyst Geetha Ranganathan wrote.