According to Thurrott.com, Spotify lost €72 million on €4.27 billion in revenue during the quarter ending September 30, 2025. The streaming service added 17 million monthly active users, reaching 713 million total – with 281 million paid subscribers and 446 million ad-supported users. Premium subscribers grew 12% year-over-year while ad-supported users grew 11%. Despite the user growth, revenue only increased 1.85% overall, though Spotify claims a 12% increase using “constant currency” calculations that exclude real-world currency fluctuations. The company launched 30 new products including lossless audio and ChatGPT integration, and announced co-founder Daniel Ek will step down as CEO on January 1, 2026.
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The Creative Accounting Problem
Here’s the thing that bothers me about Spotify‘s earnings report: they’re playing some serious financial games. The company talks about “profit expansion” and cites operating income while conveniently ignoring that €72 million loss. That’s like saying you had a great financial month because your paycheck was big, while ignoring that your rent and car payment left you in the red. And that “constant currency” claim? Basically, it’s a way to make the numbers look better than they actually are in real money. When a company with Spotify’s scale needs to use these accounting tricks, it suggests the underlying business might not be as healthy as they want investors to believe.
User Growth Versus Revenue Reality
Spotify’s user numbers are genuinely impressive – 17 million new monthly active users in one quarter is massive. But look at what’s happening beneath the surface. Premium subscribers account for €3.8 billion of revenue, up 9% year-over-year, while ad-supported revenue actually declined 6%. So they’re adding tons of users, but the money isn’t following at the same pace. This creates a real challenge: how do you monetize all these new users without pushing them away with price increases? The company is betting big on product innovation and operational leverage, but we’ve been hearing that story for years.
The Streaming Wars Intensify
Spotify’s in a tough spot competitively. Apple Music has that deep hardware integration, YouTube Music comes bundled with YouTube Premium, and Amazon Music is basically a loss leader for Prime. Meanwhile, Spotify’s pouring resources into podcasts, audiobooks, and now lossless audio – but are people actually willing to pay more for these features? The shareholder deck shows they’re throwing everything at the wall, but I wonder if they’re spreading themselves too thin. With Ek stepping down, his successor will inherit a company that’s great at growing users but still struggling to turn that growth into consistent profits.
What Comes Next?
Daniel Ek’s departure marks the end of an era, but will it change Spotify’s fundamental challenges? The new CEO will need to solve the advertising revenue problem while somehow justifying all these product investments. And let’s be real – another price hike seems inevitable, which risks pushing users toward cheaper alternatives. Spotify’s playing the long game, as Ek says, but investors might be getting impatient waiting for that game to actually become profitable. The user growth is undeniable, but sustainable profitability? That’s the billion-euro question they still haven’t answered.
