Spotify(US:SPOT)2025-07-29 20:53User Metrics - As of June 30, 2025, the company reported 696 million monthly active users (MAUs), an increase of 11% year-over-year from 626 million MAUs in 2024[101][112] - The number of Premium Subscribers reached 276 million as of June 30, 2025, reflecting a 12% increase from 246 million in 2024[102][115] - Ad-Supported MAUs grew to 433 million, marking a 10% increase from 393 million in the previous year[118] Revenue Performance - For the three months ended June 30, 2025, total revenue increased by €386 million, or 10%, reaching €4,193 million, driven primarily by a 12% increase in Premium revenue[134] - Premium revenue for the six months ended June 30, 2025 increased by €913 million, or 14%, comprising 90% of total revenue[136] - Ad-Supported revenue for the three months ended June 30, 2025 decreased by €3 million, or 1%, while for the six months it increased by €27 million, or 3%[137][138] Cost and Profit Analysis - Total cost of revenue for the three months ended June 30, 2025 increased by €178 million, or 7%, totaling €2,873 million[141] - Premium cost of revenue for the three months ended June 30, 2025 increased by €203 million, or 9%, while the percentage of Premium revenue decreased from 69% to 67%[142] - Ad-Supported cost of revenue for the three months ended June 30, 2025 decreased by €25 million, or 6%, with the percentage of Ad-Supported revenue decreasing from 87% to 82%[144] - Gross profit for the three months ended June 30, 2025 increased by €208 million, or 19%, totaling €1,320 million, with a consolidated gross margin of 31%[147] - Premium gross profit for the three months ended June 30, 2025 increased by €186 million, with a gross margin increase from 31% to 33%[148] - Ad-Supported gross profit for the three months ended June 30, 2025 increased by €22 million, with gross margin rising from 13% to 18%[150] Foreign Exchange and Economic Factors - The unfavorable impact of foreign exchange rates on total revenue for the three months ended June 30, 2025 was estimated at €168 million[139] - The company continues to monitor the macroeconomic environment, which remains uncertain due to inflation and geopolitical conflicts[107] Operating Expenses - Research and development costs for Q2 2025 increased by €36 million, or 9%, compared to Q2 2024, primarily due to a €40 million rise in social costs[152] - Sales and marketing expenses for Q2 2025 rose by €21 million, or 6%, compared to Q2 2024, driven by a €12 million increase in social costs[154] - General and administrative expenses for Q2 2025 increased by €11 million, or 9%, compared to Q2 2024[156] Financial Position - Free Cash Flow for the six months ended June 30, 2025, was €1,234 million, up from €697 million in the same period of 2024[175] - Cash and cash equivalents and short-term investments increased by €896 million from €7,448 million as of December 31, 2024, to €8,344 million as of June 30, 2025[176] - Net cash flows from operating activities increased by €545 million to €1,248 million for the six months ended June 30, 2025, compared to €703 million in the same period of 2024[184] - Free Cash Flow increased by €537 million to €1,234 million for the six months ended June 30, 2025, driven primarily by the increase in net cash flows from operating activities[187] - Net cash flows used in investing activities rose by €512 million to €718 million for the six months ended June 30, 2025, primarily due to increased cash outflows from short-term investments[185] - Net cash flows from financing activities decreased by €249 million to €137 million for the six months ended June 30, 2025, mainly due to lower cash proceeds from stock options[186] Share Repurchase and Obligations - The company has approved an additional $1.0 billion for its share repurchase program, bringing the total authorized amount to $1.0 billion since the program's inception[179] - The maximum value of shares that may yet be purchased under the share repurchase program is approximately $1,896 million[180] - As of June 30, 2025, total contractual obligations amounted to €6,678 million, with €3,880 million due within one year[192] - The company has €1,273 million in Exchangeable Notes maturing on March 15, 2026, which bear no interest[190] Sensitivity Analysis - A 10% decrease in the company's ordinary share price would result in a fair value of the Exchangeable Notes ranging from €1,845 million to €2,018 million[204] - A 10% weakening of the Euro against all translation exposure currencies would impact equity by approximately €181 million[201] - Interest income sensitivity analysis indicates that a 100 basis point change in interest rates could result in a change of €21 million and €40 million for the three and six months ended June 30, 2025, respectively[202] - The company is subject to minimum royalty payments associated with license agreements totaling €3,337 million, with €2,103 million due within one year[192] Product and Service Developments - The company launched the Spotify Partner Program on January 2, 2025, enhancing monetization for podcast creators and expanding video podcast offerings[105] - Audiobooks were introduced to the Premium Service in four additional markets as of April 16, 2025, increasing availability to 14 markets[106] - The Premium segment generates revenue primarily through subscription sales, while the Ad-Supported segment relies on advertising impressions sold on a CPM basis[122][124] - The company emphasizes user engagement and customer satisfaction as key drivers for growth in both Premium and Ad-Supported segments[112][118]