**Event** On July 29, 2025, Spotify Technology S.A. released its Q2 2025 financial results, with total revenue reaching €4.2 billion, up 10% year-over-year; gross margin reached 31.5%, an increase of 227 basis points year-over-year.

**Investment Highlights**

**Spotify Technology S.A. Achieves Record Growth in Both Premium Users and MAU** Spotify Technology S.A.'s Q2 total revenue continued to grow 10%, reaching €4.2 billion ($4.9 billion). Premium subscription revenue increased 16%, while ad-supported revenue grew 5% year-over-year. Management expects advertising business, particularly automated channel revenue, to achieve greater growth this year. Notably, Spotify Technology S.A.'s gross margin improved to 31.5%, up 227 basis points year-over-year, with 8 million net new subscribers added, bringing total premium users to 276 million, up 12% year-over-year; Monthly Active Users (MAU) increased by 18 million to 696 million, up 11% year-over-year. The actual performance of 8 million net premium user additions and 18 million MAU growth significantly exceeded the company's official guidance of 3 million subscription additions and 7 million active user targets, further confirming Spotify Technology S.A.'s competitive advantage in the global audio streaming space.

**Spotify Technology S.A.'s Audio + Video Dual Engine Expansion** Spotify Technology S.A. has made significant progress in audiobooks and video content segments. The platform currently hosts approximately 7 million podcasts, 430,000 video podcasts, and 350,000 audiobooks. The audiobooks business is expanding rapidly, recently launching new services in Germany, Austria, Switzerland, and Liechtenstein; video consumption is growing dramatically at 20 times the rate of audio-only consumption, with over 350 million users having played video podcasts on the platform, up 65% year-over-year. Excluding China and Russia, 45% of music streaming service premium users choose Spotify Technology S.A., and this proportion has been steadily increasing in recent years. According to Luminate data, 65% of global audio music playback occurs on the Spotify Technology S.A. platform, with approximately 2.5 trillion global audio plays in the first half of 2025, of which Spotify Technology S.A. accounted for approximately 1.6 trillion plays.

**Logic Behind Spotify Technology S.A.'s Regional Price Adjustments: Emerging Market Expansion** Spotify Technology S.A. employs a "portfolio approach" to pricing strategy, focusing on long-term user retention rather than short-term revenue growth. Last quarter, price adjustments in France, Belgium, Netherlands, and Luxembourg did not result in abnormal customer churn. The company plans to optimize its value proposition in Europe and Latin America while emphasizing user value perception and price competitiveness.

Chief Business Officer Alex Norström stated: "We are obsessed with providing users with cost-effective services, ensuring that every price adjustment brings more value to users." CEO Daniel Ek also emphasized: "The core of subscription business lies in retaining customers, and long-term stable user relationships are crucial to us."

**Investment Recommendation** Spotify Technology S.A. demonstrates strong performance in user growth and content moat development. Long-term, AI-powered personalized experiences, global content ecosystem, and hardware scenario extensions will drive its upgrade from a "music streaming platform" to a "global audio super app." The market should monitor its progress in AI commercialization and cost optimization effectiveness in the intelligent media sector.

**Risk Warning** Risk of slowing subscription user growth; potential volatility in technology iteration speed; risk of capacity mismatch due to terminal demand fluctuations; foreign exchange rate volatility in overseas markets.