Q2 2026 Spotify Technology SA Earnings Call Transcript
Key Points
- Revenue grew 15% year-over-year on a constant currency basis, accelerating from 14% in Q1, with record gross margin of 33.4%.
- Subscriber growth beat guidance, crossing 300 million premium subscribers for the first time, with net additions of 7 million in Q2.
- Advertising business is gaining momentum, with automated channels now representing nearly 40% of ad-supported revenue and active advertisers up 60% year-over-year.
- New AI-driven features like Prompted Playlists and the large taste model are driving engagement, with active days increasing and early retention improvements.
- Reserved ticketing partnership with Live Nation has been successful, with nearly 100,000 tickets reserved and strong sell-through, enhancing premium value.
- Audiobooks+ add-on has surpassed $100 million in annual recurring revenue, and Audiobooks penetration among premium listeners has more than doubled this year.
- Free cash flow strengthened to EUR797 million in Q2, up 14% year-over-year, with a strong balance sheet and ongoing share repurchases.
- MAU net additions of 16 million were 1 million below forecast, and Q3 guidance implies slower MAU growth due to deliberate friction in emerging markets.
- Ad-supported revenue growth remained subdued at 3% year-over-year, with declines in the direct sales channel partially offsetting gains from automation.
- Q3 gross margin guidance of 32.9% is lower than Q2's 33.4%, reflecting reinvestments and regulatory fees.
- Operating expenses are elevated in Q2 and Q3 due to marketing and AI-related investments, with EUR200 million in incremental costs expected for the full year.
- The AI music remix product is still in early stages, requiring more deals and a research preview before launch, with no clear timeline for material revenue contribution.
- The company is intentionally adding friction to the free tier in emerging markets, which could temporarily dampen user growth and engagement.
- ARPU growth is expected to moderate in Q3, with no explicit guidance on future price increases or add-on monetization timing.
Hello and welcome to the Spotify Q2 2026 earnings call. (Operator Instructions)
I would now like to turn the conference over to Bryan Goldberg, Head of Investor Relations at Spotify. You may begin.
Great. Thanks, operator, and welcome to Spotify's first (sic â second) quarter 2026 earnings conference call. Joining us today will be our co-CEOs, Alex Norström and Gustav Söderström; and our CFO, Christian Luiga. We'll start with opening comments from the team. And afterwards, we'll be happy to answer your questions.
Questions can be submitted by going to slido.com, S-L-I-D-O.com, and using the code #SpotifyEarningsQ226. Analysts can ask questions directly into Slido, and all participants can then vote on the questions they find the most relevant. If for some reason, you don't have access to Slido, you can e-mail Investor Relations at [email protected], and we'll add in your question.
Before I begin, let me quickly cover the Safe Harbor. During this call, we'll be
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