By Katherine Sayre

Spotify Technology added more subscribers in the second quarter, when the company expanded access around the world to its audiobooks and personalized music offerings. But the company swung to a loss.

The results

For the quarter, Spotify's monthly active users grew 11% to 696 million, topping the company's prior guidance by 7 million users. The gains were led by growth in Latin America, Europe and other global markets.

The audio streaming service's premium subscribers -- its most lucrative type of customer -- increased by 12% to 276 million, also beating the company's prior guidance by 3 million subscribers.

Yet the company posted a net loss of 86 million euros -- about $100 million -- or 42 euro cents a share, down from a profit of EUR274 million, or EUR1.33 a share, during the same period a year earlier. Analysts were expecting roughly EUR1.98 a share, according to FactSet.

Affecting the company's performance were higher personnel, professional services and marketing costs, as well as so-called social charges of EUR115 million. Social charges refer to payroll taxes that increase as the share price rises.

Spotify's revenue rose 10% to EUR4.19 billion, driven by a 12% increase in premium revenues. Its ad-supported revenues, an area the company has identified as an opportunity for growth, were down slightly.

The company's gross margin of 31.5% was in line with prior guidance.

The context

Spotify has built a platform with a range of audio offerings including music, podcasts and audiobooks, while raising prices without hampering subscriber growth.

Audiobooks in premium subscriptions have grown rapidly since launching in 2023, with audiobook listening hours up 35% year-over-year in the U.S., U.K. and Australia, the company said.

Meanwhile, Spotify's share price is up more than 50% this year.

The outlook

Spotify, which has sought to become an audio go-to, has been seeking to widen its margins and generate profits through a combination of price increases and reduction in spending.

For the current quarter, Spotify forecast that monthly active users would grow to 710 million, while premium subscribers would increase to 281 million.

It forecast revenue of EUR4.2 billion for the current quarter, and a gross margin of 31.1%.

Write to Katherine Sayre at katherine.sayre@wsj.com

(END) Dow Jones Newswires

July 29, 2025 06:00 ET (10:00 GMT)

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