Revenue growth decelerated to 8.2% YoY in Q1 2026 as operating margins expanded to 15.8%, demonstrating the successful transition to profitability but raising questions about the sustainability of top-line momentum.
Spotify Technology S.A. (SPOT) annual income statement — 11-year revenue, gross profit & net income history
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 |
|---|
| Sales/Revenue | 18.11B | 17.19B | 15.67B | 13.25B | 11.73B | 9.67B | 7.88B | 6.76B | 5.26B | 4.09B | 2.95B | 1.94B |
| Revenue Growth % | 9.03% | 9.65% | 18.31% | 12.96% | 21.3% | 22.69% | 16.5% | 28.62% | 28.58% | 38.55% | 52.16% | - |
| Cost of Goods Sold | 12.17B | 11.69B | 10.95B | 9.85B | 8.8B | 7.08B | 5.87B | 5.04B | 3.91B | 3.24B | 2.55B | 1.71B |
| COGS % of Revenue | - | 68.02% | 69.86% | 74.36% | 75.05% | 73.2% | 74.43% | 74.54% | 74.27% | 79.24% | 86.42% | 88.35% |
| Gross Profit | 5.94B | 5.5B | 4.72B | 3.4B | 2.93B | 2.59B | 2.02B | 1.72B | 1.35B | 849M | 401M | 226M |
| Gross Margin % | 32.8% | 31.98% | 30.14% | 25.64% | 24.95% | 26.8% | 25.57% | 25.46% | 25.73% | 20.76% | 13.58% | 11.65% |
| Gross Profit Growth % | - | 16.34% | 39.06% | 16.1% | 12.93% | 28.59% | 17.02% | 27.27% | 59.36% | 111.72% | 77.43% | - |
| Operating Expenses | 3.29B | 3.3B | 3.36B | 3.84B | 3.58B | 2.5B | 2.31B | 1.79B | 1.4B | 1.23B | 750M | 461M |
| OpEx % of Revenue | - | 19.19% | 21.43% | 29.01% | 30.57% | 25.83% | 29.29% | 26.54% | 26.55% | 30% | 25.41% | 23.76% |
| Selling, General & Admin | 1.96B | 1.91B | 1.87B | 2.12B | 2.2B | 1.58B | 1.47B | 1.18B | 903M | 831M | 543M | 325M |
| SG&A % of Revenue | - | 11.08% | 11.95% | 15.99% | 18.74% | 16.39% | 18.67% | 17.45% | 17.17% | 20.32% | 18.39% | 16.75% |
| Research & Development | 1.33B | 1.39B | 1.49B | 1.73B | 1.39B | 912M | 837M | 615M | 493M | 396M | 207M | 136M |
| R&D % of Revenue | - | 8.11% | 9.48% | 13.02% | 11.83% | 9.43% | 10.62% | 9.09% | 9.37% | 9.68% | 7.01% | 7.01% |
| Other Operating Expenses | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Operating Income | 2.65B | 2.2B | 1.36B | -446M | -659M | 94M | -293M | -73M | -43M | -378M | -349M | -235M |
| Operating Margin % | 14.65% | 12.79% | 8.71% | -3.37% | -5.62% | 0.97% | -3.72% | -1.08% | -0.82% | -9.24% | -11.82% | -12.11% |
| Operating Income Growth % | - | 61.03% | 406.05% | 32.32% | -801.06% | 132.08% | -301.37% | -69.77% | 88.62% | -8.31% | -48.51% | - |
| EBITDA | 2.76B | 2.3B | 1.49B | -288M | -488M | 221M | -182M | 14M | -11M | -324M | -311M | -205M |
| EBITDA Margin % | 15.22% | 13.38% | 9.48% | -2.17% | -4.16% | 2.29% | -2.31% | 0.21% | -0.21% | -7.92% | -10.54% | -10.57% |
| EBITDA Growth % | 40.74% | 54.78% | 615.97% | 40.98% | -320.81% | 221.43% | -1400% | 227.27% | 96.6% | -4.18% | -51.71% | - |
| D&A (Non-Cash Add-back) | 104M | 102M | 121M | 158M | 171M | 127M | 111M | 87M | 32M | 54M | 38M | 30M |
| EBIT | 3.54B | 2.25B | 1.38B | -467M | -329M | 289M | -655M | -88M | -167M | -1.23B | -530M | -224M |
| Net Interest Income | 214M | 214M | 187M | 93M | 6M | -29M | -34.43M | -11.83M | 19M | -490.51M | 0 | 1M |
| Interest Income | 248M | 245M | 223M | 131M | 47M | 11M | 15.82M | 30.56M | 25M | 18.31M | 5M | 2M |
| Interest Expense | 34M | 31M | 36M | 38M | 41M | 40M | 50.25M | 42.39M | 6M | 508.82M | 5M | 1M |
| Other Income/Expense | 852M | 26M | -24M | -59M | 289M | 155M | -416M | -58M | -130M | -855M | -186M | 10M |
| Pretax Income | 3.5B | 2.22B | 1.34B | -505M | -370M | 249M | -709M | -131M | -173M | -1.23B | -535M | -225M |
| Pretax Margin % | 19.35% | 12.94% | 8.56% | -3.81% | -3.16% | 2.58% | -9% | -1.94% | -3.29% | -30.15% | -18.12% | -11.6% |
| Income Tax | 166M | 12M | 203M | 27M | 60M | 283M | -128M | 55M | -95M | 2M | 4M | 5M |
| Effective Tax Rate % | 4.74% | 0.54% | 15.14% | -5.35% | -16.22% | 113.65% | 18.05% | -41.98% | 54.91% | -0.16% | -0.75% | -2.22% |
| Net Income | 3.34B | 2.21B | 1.14B | -532M | -430M | -34M | -581M | -186M | -78M | -1.24B | -539M | -230M |
| Net Margin % | 18.43% | 12.87% | 7.26% | -4.02% | -3.67% | -0.35% | -7.37% | -2.75% | -1.48% | -30.2% | -18.26% | -11.86% |
| Net Income Growth % | 314.27% | 94.38% | 313.91% | -23.72% | -1164.71% | 94.15% | -212.37% | -138.46% | 93.68% | -129.13% | -134.35% | - |
| Net Income (Continuing) | 3.34B | 2.21B | 1.14B | -532M | -430M | -34M | -581M | -186M | -78M | -1.24B | -539M | -230M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | 15.99 | 10.51 | 5.50 | -2.73 | -2.93 | -1.03 | -3.10 | -1.03 | -0.51 | -6.93 | -3.21 | -1.37 |
| EPS Growth % | 256.99% | 91.09% | 301.47% | 6.83% | -184.47% | 66.77% | -200.97% | -101.96% | 92.64% | -115.89% | -134.31% | - |
| EPS (Basic) | - | 10.77 | 5.67 | -2.73 | -2.23 | -0.18 | -3.10 | -1.03 | -0.44 | -6.93 | -3.21 | -1.37 |
| Diluted Shares Outstanding | 208.86M | 210.51M | 206.99M | 194.73M | 195.85M | 193.94M | 187.58M | 180.96M | 181.21M | 178.11M | 167.78M | 167.78M |
| Basic Shares Outstanding | 205.79M | 205.41M | 200.62M | 194.73M | 192.93M | 191.3M | 187.58M | 180.96M | 177.15M | 178.11M | 167.78M | 167.78M |
| Dividend Payout Ratio | - | - | - | - | - | - | - | - | - | - | - | - |
Quick answers to the most common questions about buying SPOT stock.
For fiscal year 2025, Spotify Technology S.A. (SPOT) reported total revenue of $17.19B. This represents a 785.9% increase compared to $1.94B in 2015.
Spotify Technology S.A. (SPOT) is profitable, generating $2.21B in net income for the fiscal year ending 2025 with a net profit margin of 12.9%.
Spotify Technology S.A. (SPOT) reported an operating income of $2.20B, resulting in an operating profit margin of 12.8%. This margin reflects the operational efficiency of the business before interest and taxes.
Spotify Technology S.A. (SPOT) generated $5.50B in gross profit for the year, representing a gross profit margin of 32.0%. This demonstrates the company's core pricing power and production efficiency.
Key Metrics
Top Statement Risk
Growth deceleration amid premium valuation
Revenue Growth Decelerating Sequentially
After several quarters of strong double-digit expansion, Spotify's revenue growth decelerated to 8.2% year-over-year in Q1 2026, as reported in the provided income statement data, suggesting the company is maturing in its core markets and facing tougher comparables.
The growth profile has shifted from a robust 15-20% range in early 2024 to a low-to-mid single-digit trajectory, indicating the initial post-pandemic surge has normalized. This deceleration appears to be a natural progression as the global MAU base scales and the law of large numbers takes hold, though it will pressure the market's expectation for a high-growth premium. Investors must now focus on whether growth can stabilize through ARPU increases rather than just user addition.
Gross Margin Structure Appears to be Shifting
Gross margin has expanded meaningfully from 27.6% in Q1 2024 to 33.4% in Q2 2026, a trend that appears to reflect successful pricing power and a strategic shift in content cost mix away from pure music royalties.
This structural improvement suggests the 'Marketplace' tools and the expansion into podcasts and audiobooks are beginning to alter the company's cost dynamics, reducing the direct linkage to major label royalty rates. The margin profile now appears more like a platform than a pure distributor, which could support a re-rating if the trend proves durable. However, the sustainability of this expansion will depend on maintaining leverage in negotiations with rights holders.
Operating Leverage Demonstrated in SG&A
Spotify is exhibiting significant operating leverage, as operating income grew 290% from $168M in Q1 2024 to $655M in Q2 2026, with SG&A growing at a substantially slower pace, indicating successful overhead control as the business scales.
The operating margin expansion from 4.6% to 13.7% over this period highlights that incremental revenue is flowing to the bottom line more efficiently. This appears to be driven by disciplined hiring and sales & marketing optimization relative to the revenue base. The company's cost structure now suggests it can sustain profitability even if top-line growth moderates, a critical shift from its earlier growth-at-all-costs phase.
Net Income Volatility from Non-Operational Items
Reported net income shows extreme volatility, swinging from a loss of $86M in Q2 2025 to a profit of $1.2B in Q2 2025, indicating that non-operational items significantly distort the underlying earnings power of the business.
The massive swing suggests one-time gains or losses, likely related to investment revaluations or tax adjustments, are obscuring the core operational trend. Excluding these, the trend in operating income is far more stable and indicative of the business's true performance. Investors should focus on operating metrics to assess sustainable earnings quality, as the EPS figures are highly unreliable for modeling future cash flows.
Operating Margin Inflection Point Reached in 2024
The most significant operational inflection occurred between Q1 2024 and Q2 2024, when operating margin surged from 4.6% to 7.0% and has since remained in double digits, marking a new era of profitability for the company.
This inflection was not a one-quarter event but the beginning of a sustained trend, driven by concurrent gross margin expansion and operating expense discipline. The event fundamentally changed the investment thesis, moving Spotify from a cash-burning growth story to a self-funding platform. The lasting impact is a balance sheet that can now support strategic investments without immediate need for external capital.
Margin Expansion May Hit a Structural Ceiling
Despite impressive progress, the gross margin ceiling of ~33% could prove difficult to breach further, as the core music royalty structure remains dictated by oligopolistic label power, limiting the long-term margin profile relative to software peers.
The market may be extrapolating recent margin gains indefinitely, but the fundamental cost of goods sold is locked in by long-term licensing agreements. If podcast and audiobook investments fail to deliver significantly higher-margin revenue streams, the gross margin could plateau, limiting operating leverage and EPS growth potential. This represents a key risk to the premium valuation multiple, as it may cap the ultimate earnings power of the model.