Spotify added one million more premium subscribers than expected in the second quarter of 2026, reaching 300 million paying users as revenue grew 14% year over year, according to Billboard. The company reported its Q2 2026 earnings on Tuesday, August 4.

The streaming service added seven million net new premium subscribers in the quarter, beating its own guidance of six million. Revenue from those paying users rose 15% to 4.3 billion euros from a year earlier. Total monthly active users reached 777 million — short of the 778 million Spotify had forecast in April, which itself had exceeded analyst estimates of 773 million (Reuters).

The financial picture was strong on profitability. Gross margin — the share of revenue left after the direct costs of running the service — expanded by 193 basis points to 33.4%, beating guidance. Gross profit rose 21% to 1.6 billion euros. Operating income totalled 655 million euros, a 13.7% margin, also above what the company had told investors to expect. The premium tier's gross margin reached 34.9%, up 174 basis points year over year (Investing.com).

Not every number beat expectations. Spotify added 16 million net new monthly active users, missing its target of 17 million. Ad-supported revenue — the money Spotify earns from users on the free, advertising-supported tier — rose just 1% to 446 million euros. The free tier grew by 11 million users to 494 million. Operating expenses rose 3% to 941 million euros, driven by spending on technology, including artificial intelligence, and marketing.

The AI spending is going toward products the company is keen to highlight. Co-CEOs Alex Norström and Gustav Söderström — speaking publicly to investors for the first time since the company's investor day in May — said new features including ticket reservation, AI playlisting and AI remixing tools showed strong momentum (Billboard).

The AI remix tool is the one drawing the most attention. Spotify plans to roll out a preview that will let fans of a participating artist make remixes of that artist's songs, collecting user feedback to improve the model before a fuller catalogue becomes available. The company has not given a timeline for the full launch. Two major rightsholders have signed on: Universal Music Group and Merlin, the independent label collective, have both licensed their artists' music for the tool on an opt-in basis. Spotify said it will compensate and credit artists, songwriters and other rights holders covered by those agreements.

Söderström acknowledged the tension. Artists are skeptical of AI music, he said, but the company is seeing strong uptake for the remix initiative specifically.

Despite the broadly positive results, Spotify's stock was down 1.5% to $479 a share at 1 p.m. in New York on the earnings day — a reminder that beating internal targets does not always satisfy market expectations.

The quarter continues a trajectory visible since at least Q3 2025, when Spotify posted 12% revenue growth and an operating income of 582 million euros (Spotify Newsroom). Margins have widened each quarter since, from 31.6% in Q3 2025 to 33.4% now. The question for the rest of 2026 is whether the AI tools under development justify the rising operating costs — and whether artists who opt in agree that the trade-off is worth it.