Spotify reported its second-quarter 2026 results, with paid subscribers rising above 300 million for the first time after adding 7 million net subscribers in the quarter. Monthly active users reached 777 million, up 12% from a year earlier. Revenue came in at 4.78 billion euros, up 14% year over year, while net profit was 545 million euros. Gross margin hit a record 33.4%, and operating income of 655 million euros came in above the market expectation of 639.2 million euros.
Still, the overall report and the company’s guidance for the third quarter fell short of market expectations in key areas. Spotify said it expects Q3 monthly active users to reach 788 million, below analysts’ estimate of 793 million. It also forecast operating income of 670 million euros, under the expected 677.8 million euros. Shares closed down 1.57% on Tuesday.
The company said it is stepping up spending on marketing and AI, with second-quarter operating expenses rising 19% year over year to 941 million euros. Spotify also said it has partnered with independent music licensing agency Merlin to expand AI remixing and AI cover tools to more than 30,000 independent labels, with plans to launch the tools as paid add-on services.
Spotify reported second-quarter 2026 results showing paid subscribers climbed above 300 million for the first time, with net additions of 7 million in the quarter. Monthly active users, or MAUs, reached 777 million, up 12% from a year earlier.
On the financial side, Q2 revenue was 4.78 billion euros, up 14% year over year. Net profit came to 545 million euros, while gross margin reached a record 33.4%. Operating income was 655 million euros, above the market expectation of 639.2 million euros.
Third-quarter guidance came in below expectations
Even with stronger readings in some areas, the earnings report and Spotify’s third-quarter guidance did not fully meet market expectations. The company said it expects Q3 MAUs to reach 788 million, below analysts’ forecast of 793 million. It also projected operating income of 670 million euros, compared with an expected 677.8 million euros. Spotify shares closed down 1.57% on Tuesday.
Higher spending on marketing and AI
Spotify said it is increasing investment in marketing and AI. Operating expenses in the second quarter rose 19% from a year earlier to 941 million euros.
In its AI business, Spotify said it has reached a partnership with Merlin, an independent music licensing agency, to extend AI remix and AI cover features to more than 30,000 independent labels. The company also plans to roll out those tools as paid add-on services.
Executives outline AI music focus
Company executives said the focus of Spotify’s AI music products is to involve real artists in AI creation rather than generate “fake artists.” At the same time, Spotify continues to face competitive pressure as user growth slows in Europe and the United States and disputes over AI music copyright intensify.
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