AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 3/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Launched personalization and social features establish capabilities, but no comparative evidence establishes a structural advantage.
durability · — · Repeated commercial growth and repricing do not establish a durable barrier to imitation or entry. Content and distribution dependencies leave protection uncertain.
customer dependency · — · Subscriber growth does not identify switching friction, retained cohorts or customer dependency.
erosion resilience · — · Premium strength and advertising weakness provide mixed commercial signals without establishing how a structural advantage withstands competitive pressure.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Price increases contributed €0.49 to annual Premium ARPU in 2024 and €0.25 in 2025, while subscribers grew. Premium represented 89% of 2025 revenue, supporting strong demonstrated pricing despite weaker advertising rates and currency and mix offsets. This does not establish exceptional durability.
retention · 2/4 · Subscriber growth alongside realized repricing in 2024 and 2025 provides indirect evidence of continuing demand. Net growth can conceal customer departures; no retention rate or cohort evidence is supplied.
margin resilience · 2/4 · The 2024 operating profit following losses and 2025 improvement in operating cash generation indicate improved ability to cover costs. Royalty commitments and advertising rate weakness temper that evidence. The passages do not isolate price-driven margin effects or supply a comparable margin series.
contractual freedom · 2/4 · Implemented subscription increases demonstrate practical repricing ability, and biddable advertising supports market-based price formation. Negotiated royalty rates and minimum commitments constrain economic flexibility. Full customer pricing restrictions and renewal terms are not supplied.
Predictability95
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 100.00
- Revenue growth volatility (pp)
- 4.53
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 6.56
Financial strength—
Missing required inputs: debtFcfGrade, netDebtEbitGrade. Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- interestCoverageGrade
- 66.03
- currentRatioGrade
- 77.99
- Interest coverage (x)
- 8.26
- Current ratio (x)
- 1.72
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- 2.11
- 3-year average SBC / revenue (%)
- 1.85
- cashConversionGrade
- 0.00
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating cash flows improved by €632 million in 2025, and repurchases were funded from cash and operations. Minimum royalty commitments declined, but substantial commitments and additional subsequent agreements remain. Repurchases and option-related financing demonstrate actual activity, without establishing buyback value creation or comprehensive investment returns.
incentive alignment · 2/4 · Actual 2025 awards included options and RSUs, and recognized management compensation was predominantly share-based, providing equity exposure. Executives could choose different allocations, including cash. Supplied disclosures do not establish executive performance hurdles, full vesting terms or ownership requirements.
execution · 3/4 · Premium revenue grew 11% in 2025 with subscriber growth and realized repricing, following subscriber and ARPU growth in 2024. Product launches and improved operating cash generation reinforce execution. This is an indirect assessment from business outcomes; advertising weakness and internally measured user metrics limit the conclusion.
governance · 2/4 · The adopted related-party policy requires audit committee review of material transactions. Counterbalancing weaknesses include no nominating and governance committee and no general shareholder approval requirement for equity plans under home-country practice. Actual disclosures support a mixed assessment; complete board independence and voting-control information are missing.
Evidence
We continue to enhance the user experience by embedding AI to improve discovery and personalization across our platform.
User experience: management description of AI personalization · Filed 10/02/2026
In April 2025, we expanded our AI Playlist feature to over 40 markets, enabling users to generate personalized playlists using written prompts.
User experience: AI Playlist market expansion · Filed 10/02/2026
We also introduced Messages on August 26, 2025, giving mobile users in select markets a fast and convenient way to share and discuss music, podcasts, and audiobooks with friends.
User experience: Messages launch · Filed 10/02/2026
The increase was due primarily to an increase in the number of Premium Subscribers, partially offset by a decrease in Premium ARPU, as described above.
Operating results: Premium subscriber growth and ARPU · Filed 10/02/2026
As a general matter, the music and other content made available on the Group’s Service are licensed to the Group by various third parties.
Commitments and contingencies: third-party content licensing · Filed 10/02/2026
Commitments The Group is subject to the following minimum guarantees relating to the content on its Service, the majority of which relate to minimum royalty payments associated with its license agreements for the use of licensed content, as at December 31: 2025 2024 2023 (in € millions) Not later than one year 1,123 3,021 1,055 Later than one year but not more than five years 1,490 1,399 3,610 Total 2,613 4,420 4,665 In addition, the Group is subject to various non-cancelable purchase obligations and service agreements with minimum spend commitments, including a service agreement with Google for the use of Google Cloud Platform and certain content and marketing commitments as at December 31: 2025 2024 2023 (in € millions) Not later than one year 626 598 453 Later than one year but not more than five years 896 1,021 1,369 More than five years 53 68 83 Total 1,575 1,687 1,905 Contingencies Various legal actions, proceedings, and claims are pending or may be instituted or asserted against the Group.
Financial statement commitments: minimum royalties and non-cancelable spending · Filed 10/02/2026
Risks Related to Our Operations Streaming depends on effectively working with operating systems, online platforms, hardware, networks, regulations, and standards we do not control.
Operational risks: dependence on external platforms and standards · Filed 10/02/2026
This decrease was due primarily to a decrease in our direct music channels and ad sales from podcasts of €116 million due to a decrease in fixed-CPM rates as well as a decrease in music impressions sold.
Operating results: advertising rate and impression declines · Filed 10/02/2026
These decreases were largely offset by an increase in Premium ARPU of €0.25 as a result of price increases.
Annual Premium ARPU: contribution from price increases · Filed 10/02/2026
This decrease of €0.06 was primarily attributable to unfavorable movements in foreign exchange rates, decreasing Premium ARPU by €0.17, and changes in product and market mix, decreasing Premium ARPU by €0.14.
Annual Premium ARPU: currency and mix effects · Filed 10/02/2026
The increase of €0.30 was primarily driven by price increases resulting in an increase in Premium ARPU of €0.49, partially offset by changes in product and market mix, decreasing Premium ARPU by €0.12, as well as unfavorable movements in foreign exchange rates, decreasing Premium ARPU by €0.07.
2024 annual Premium ARPU: price, mix and currency contributions · Filed 05/02/2025
The increase was due primarily to an increase in the number of Premium Subscribers and an increase in Premium ARPU of 7%, as noted above.
2024 operating results: Premium subscriber and ARPU growth · Filed 05/02/2025
This decrease was partially offset by an increase in our automated sales channels of €103 million driven by an increase in music impressions sold primarily on our biddable offerings.
Operating results: automated advertising and biddable offerings · Filed 10/02/2026
While for the year ended December 31, 2024, we had operating income of €1,365 million, for the years ended December 31, 2023 and December 31, 2022, our operating losses were €446 million and €659 million, respectively.
Historical operating income and losses · Filed 05/02/2025
For the year ended December 31, 2025, as compared to 2024, net cash flows from operating activities increased by €632 million.
Liquidity: increase in operating cash flows · Filed 10/02/2026
The increase was due primarily to an increase of €767 million in operating income adjusted for non-cash items including depreciation, amortization, impairment, and share-based compensation expense.
Liquidity: operating earnings contribution to cash-flow improvement · Filed 10/02/2026
The change from €729 million of net cash flows from financing activities in 2024 to €381 million of net cash flows used in financing activities in 2025 was due primarily to a decrease in proceeds from the exercise of stock options of €561 million and an increase in repurchases of ordinary shares of €439 million.
Financing cash flows: option proceeds and repurchases · Filed 10/02/2026
As of December 31, 2025, the Company repurchased 1,237,497 shares for €530 million under this program.
Share repurchases: cumulative program purchases · Filed 10/02/2026
The Company uses current cash and cash equivalents and the cash flow it generates from operations to fund the share repurchase program.
Capital management: repurchase funding · Filed 10/02/2026
The following table shows the dollar amount of incentive compensation awarded to each named executive officer, as well as the allocations chosen by each such individual: Named Executive Officer Aggregate Long-Term Incentive Award Dollar Value ($) 2025 At-the-Money Stock Option Allocation 2025 Out-of-the-Money Stock Option Allocation 2025 RSU Allocation 2025 Cash Allocation ($) Daniel Ek — — — — — Alex Norström 12,500,000 31,133 — 10,378 — Gustav Söderström 12,500,000 31,133 — 10,378 — Christian Luiga 5,000,000 6,227 — — 3,750,000 Dustee Jenkins 4,500,000 11,208 — 3,736 — 65 Table of Contents Long-Term Incentive Award Decisions Each year our people experience and compensation committee reviews and, if needed, recommends updates to our current equity program to our board of directors for approval in order to incentivize our employees, including our named executive officers.
Executive compensation: actual 2025 incentive awards and allocations · Filed 10/02/2026
2025 2024 2023 (in € millions) Key management compensation Short term employee benefits 5 7 10 Share-based compensation 32 37 33 Total 37 44 43 Other related party transactions On August 23, 2021, the Company issued, for €31 million, warrants to acquire 800,000 ordinary shares to Mr.
Related parties: recognized key management compensation · Filed 10/02/2026
We do not have a nominating and corporate governance committee.
Corporate governance: absence of nominating and governance committee · Filed 10/02/2026
Under home country practice, shareholder approval of stock option plans and other equity compensation arrangements is not required; however, we are required to seek shareholder approval of the compensation paid to our directors.
Corporate governance: shareholder approval requirements for compensation · Filed 10/02/2026
Our board of directors has adopted the Related Party Transaction Policy, which requires that any material transaction between us and any related party, including our directors and senior management as well as their family members, be reviewed and approved by the audit committee to ensure that the transaction is on terms comparable to those that could be obtained in arm’s length dealings with an unrelated third party.
Related parties: audit committee transaction approval policy · Filed 10/02/2026
These metrics are calculated using internal company data and have not been validated by an independent third party.
Metrics risks: internal data without independent validation · Filed 10/02/2026
2024 2024 vs. 2023 (in € millions, except percentages) Premium 15,350 13,819 11,566 1,531 11 % 2,253 19 % Ad-Supported 1,836 1,854 1,681 (18) (1) % 173 10 % Total 17,186 15,673 13,247 1,513 10 % 2,426 18 % Premium revenue For the years ended December 31, 2025 and 2024, Premium revenue comprised 89% and 88%, respectively, of our total revenue.
Operating results: Premium, advertising and total revenue · Filed 10/02/2026
Royalty costs are primarily recorded in each segment based on specific rates for each segment agreed to with rights holders.
Segment information: royalty rates agreed with rights holders · Filed 10/02/2026
Subsequent to the end of the reporting period, the Group signed several license agreements with certain content providers which include minimum guarantee and spend commitments of approximately €202 million over the next three years.
Subsequent events: additional content license commitments · Filed 10/02/2026
