Spotify announced on 4 August 300 million paying subscribers. No other audio streaming service has passed that threshold. In the second quarter of 2026 it added seven million subscribers.
Subscriber growth year on year reached 9%. A round milestone makes a good headline for the media. More interesting is what happened below it. Spotify reported an operating profit of €655 million, 61% higher year on year.
The gross margin rose to 33.4%, about 193 basis points higher than a year earlier and the highest in the company's publicly reported history. For years the idea prevailed that Spotify collects users, but the money flows through to rights holders and little is left. The latest figures adjust that view.
Where the money is coming from
Total revenue for the quarter reached roughly €4.8 billion, up 14% year on year and 15% at constant exchange rates. Subscriptions carry most of the weight.
Revenue from premium plans reached €4.331 billion, up 16% year on year at constant rates. Average revenue per premium subscriber rose to just under €4.90, up 7.4% year on year.
Advertising remains a side track. Revenue from the ad-supported tier was €446 million, up just 3% year on year at constant rates. Advertising revenue is growing far more slowly than subscriptions. Profit is now being pulled by the subscription price and the margin. Selling ad inventory around podcasts remains a minor contributor.
What keeps the margin high
Total monthly active users reached 777 million, up 12% year on year. Only a minority of them pay for the premium tier. That is the difference between two metrics that media often blend together. Reach determines bargaining power against labels and advertisers, but profit from operations is carried by the paying accounts.
The record margin is down to a combination of higher average revenue per subscriber and lower production risk. The model in which exclusive shows were bought at high prices has given way to one where the platform pays for distribution and licences, and production risk stays with the creators. Net profit ended at €545 million, against a loss of €86 million a year earlier.
Bargaining power of creators and rights holders
For creators and rights holders, the balance has shifted. As long as Spotify was itself losing money, it had an argument for low payouts. A company reporting a record margin and hundreds of millions in operating profit loses that argument. Music labels and podcast producers will point to the record operating profit in future contract negotiations.
Competitors measure reach in other units. YouTube Music and Amazon Music operate inside larger ecosystems, where music streaming is subsidised by other products. Apple Music functions as an add-on to hardware sales. Spotify is the only big player for whom audio streaming is the core business, and the only one that now has to defend its margin on its own. That makes its numbers a clearer reference for how much audio streaming actually earns.
A European company under dual leadership
The quarter was the first earnings call under a new arrangement, in which the company is led by Co-CEOs Alex Norström and Gustav Söderström after founder Daniel Ek moved into the role of executive chairman. The split leadership comes at a time when the story's centre of gravity shifts from user growth to defending profit.
Spotify remains one of the few European technology companies of global scale, and the only one that sets prices on the world market for audio streaming. For European brands deciding where to allocate budgets for audio advertising and branded podcasts, the key point is that advertising revenue is growing slowly and Spotify is not building its profit on it. Pressure on yield comes through the subscription price. How much of the audio economy the platform keeps and how much reaches creators will be negotiated against a figure that gives creators a better hand than ever before.
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