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 · 19/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Delivered personalization and sharing features establish capabilities, but no supplied comparison demonstrates defensible switching costs, network effects or relative cost advantages.
durability · — · Price realization across several periods is demonstrated; its structural protection and longevity are not. Content licensing and platform access remain external dependencies.
customer dependency · — · Subscriber growth alongside price increases indicates demand but cannot establish customer dependency, migration friction or cohort retention, particularly with trial-supported acquisition.
erosion resilience · — · Premium demand and improving operations are favorable, but the passages cannot establish preservation of a structural advantage against competition. Advertising weakness is realized; platform restrictions are chiefly prospective risks.
Pricing power63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 3/4 · Price increases contributed €0.49 to 2024 Premium ARPU, €0.25 in 2025 and €0.45 in first-half 2026. Second-quarter 2026 reported ARPU rose 7% alongside 9% subscriber growth. Premium supplied 91% of first-half revenue. Actual advertising CPM weakness limits breadth and precludes an exceptional grade.
retention · 2/4 · Subscribers reached 300 million, up 9% year over year, despite implemented price increases. This is indirect evidence of continuing demand; acquisition and trials could conceal departures, and no churn or cohort renewal rates are supplied.
margin resilience · 3/4 · First-half 2026 revenue rose to €9,310 million, gross profit to €3,091 million and operating income to €1,370 million, while operating cash flow reached €1,652 million. These results alongside realized pricing demonstrate improving resilience. Historical losses, advertising softness and content commitments limit durability; the passages do not isolate pricing's contribution to margins.
contractual freedom · 2/4 · Implemented subscription increases demonstrate practical pricing discretion, and biddable advertising permits market-based pricing. Content guarantees and potential platform payment requirements constrain commercial flexibility. Complete subscription and advertiser contractual terms are unavailable.
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
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 3/4 · First-half operating cash flow of €1,652 million, €1,304 million of note repayment, actual open-market repurchases and €9,388 million of remaining cash and short-term investments demonstrate strong current funding discipline. Content guarantees declined while other purchase commitments increased. Equity issuance and compensation continue; repurchases do not prove undervaluation or exceptional investment returns.
incentive alignment · 2/4 · Actual 2025 option and RSU awards and €32 million of recognized key-management share-based compensation establish equity-linked incentives. Executives selected differing award mixes, including substantial cash for the CFO. Ownership percentages and complete performance conditions are absent, and awards are not assumed to have vested.
execution · 3/4 · Subscriber growth, realized pricing, 13% first-half Premium revenue growth and higher operating profit and cash generation demonstrate strong operating execution. Delivered features add implementation evidence. Advertising remains weaker. First-half 2026 results provide initial operating evidence after the January co-CEO transition, without proving individual causation or long-term leadership performance.
governance · 2/4 · Required audit committee review of material related-party transactions provides a concrete safeguard. The absence of a nominating and governance committee and lack of required shareholder approval for employee equity plans weaken oversight. Current full-board independence and voting-control percentages are not established.
Evidence
On August 19, 2025, we launched playlist mixing features, giving subscribers the ability to add and customize transitions between tracks.
Enhancing the listening and user experience / playlist mixing launch · 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.
Enhancing the listening and user experience / Messages launch · 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.
Enhancing the listening and user experience / AI Playlist expansion · Filed 10/02/2026
Our Premium Subscribers have grown 9% year-over-year, as of June 30, 2026, to 300 million.
MD&A / Overview / Premium Subscriber growth · Filed 04/08/2026
Three months ended June 30,
Six months ended June 30,
2026
2025
Change
2026
2025
Change
Premium ARPU
€
4.89
€
4.57
€
0.32
7
%
€
4.82
€
4.65
€
0.17
4
%
For the three months ended June 30, 2026 and 2025, Premium ARPU was €4.89 and €4.57, respectively, which represented an increase of 7%.
MD&A / Premium ARPU / quarterly and six-month results · Filed 04/08/2026
This increase of €0.32 is primarily attributable to price increases, resulting in a €0.49 increase in Premium ARPU.
MD&A / Premium ARPU / quarterly price-increase contribution · Filed 04/08/2026
This increase of €0.17 is primarily attributable to price increases, resulting in a €0.45 increase in Premium ARPU.
MD&A / Premium ARPU / six-month price-increase contribution · Filed 04/08/2026
Historically, Premium Subscriber growth benefits when we run such trial programs.
MD&A / Overview / trial-program contribution to subscriber growth · Filed 04/08/2026
The Group depends on securing content licenses from a number of major and minor content owners and other rights holders in order to provide its service.
Financial statement notes / dependence on content licenses · Filed 04/08/2026
Online platforms may limit our access to information about users, limiting our ability to convert and retain them.
Platform-access risks / user information and retention · 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.
MD&A / 2024 Premium ARPU / price, mix and currency contributions · Filed 05/02/2025
These decreases were largely offset by an increase in Premium ARPU of €0.25 as a result of price increases.
MD&A / 2025 Premium ARPU / price-increase contribution · 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.
MD&A / 2025 Ad-Supported revenue / fixed-CPM and impression weakness · Filed 10/02/2026
For the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, Ad-Supported revenue decreased €16 million, or 2%.
MD&A / six-month 2026 Ad-Supported revenue decline · Filed 04/08/2026
This decrease was due primarily to the impact of foreign exchange as discussed below.
MD&A / six-month 2026 Ad-Supported revenue / foreign-exchange explanation · Filed 04/08/2026
Financial Statements
Interim condensed consolidated statement of operations
(Unaudited)
(in € millions, except share and per share data)
Three months ended June 30,
Six months ended June 30,
Note
2026
2025
2026
2025
Revenue
20
4,777
4,193
9,310
8,383
Cost of revenue
3,181
2,873
6,219
5,737
Gross profit
1,596
1,320
3,091
2,646
Research and development
403
415
734
794
Sales and marketing
390
364
732
678
General and administrative
148
135
255
259
941
914
1,721
1,731
Operating income
655
406
1,370
915
Finance income
4
86
89
334
160
Finance costs
4
(21)
(447)
(47)
(699)
Finance income/(costs) - net
65
(358)
287
(539)
Income before tax
720
48
1,657
376
Income tax expense
5
175
134
391
237
Net income/(loss) attributable to owners of the parent
545
(86)
1,266
139
Earnings/(loss) per share attributable to owners of the parent
Basic
6
2.65
(0.42)
6.15
0.68
Diluted
6
2.61
(0.42)
6.06
0.66
Weighted-average ordinary shares outstanding
Basic
6
205,788,241
205,426,999
205,752,745
204,950,112
Diluted
6
208,858,469
205,426,999
209,078,186
210,475,453
The accompanying notes are an integral part of the interim condensed consolidated financial statements.
Unaudited interim consolidated statement of operations / June 2026 · Filed 04/08/2026
Operating activities
Net cash flows from operating activities increased by €404 million to €1,652 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025.
MD&A / Operating activities / six-month 2026 operating cash flow · Filed 04/08/2026
21.Commitments and contingencies
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:
June 30, 2026
December 31, 2025
(in € millions)
Not later than one year
979
1,123
Later than one year but not more than five years
1,311
1,490
2,290
2,613
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:
June 30, 2026
December 31, 2025
(in € millions)
Not later than one year
665
626
Later than one year but not more than five years
960
896
More than five years
49
53
1,674
1,575
Contingencies
Various legal and regulatory actions, proceedings, claims, and inquiries are pending or may be instituted or asserted against the Group.
Note 21 / content guarantees and non-cancelable purchase commitments · Filed 04/08/2026
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.
Risk factors / realized operating income and historical losses · Filed 05/02/2025
This decrease was partially offset by an increase in our automated sales channels of €120 million due primarily to an increase in music impressions sold on our biddable offerings.
MD&A / Ad-Supported revenue / biddable offerings · Filed 04/08/2026
F-54
Similarly, online platforms may force us to use the platform’s payment processing systems that may be inferior to, and more costly than, other payment processing services available in the market.
Platform-access risks / payment-processing requirements · Filed 10/02/2026
The change was due primarily to the repayment of the Exchangeable Notes of €1,304 million.
MD&A / Financing activities / Exchangeable Notes repayment · Filed 28/04/2026
Cash and cash equivalents and short term investments decreased by €79 million from €9,467 million as of December 31, 2025 to €9,388 million as of June 30, 2026.
MD&A / Liquidity / cash and short-term investment balances · Filed 04/08/2026
Maximum Value of Shares that May Yet Be Purchased Under the Plans or Programs (3)
April 1, 2026 - April 30, 2026
500,000
'(4)
€
—
—
€
896,462,543
May 1, 2026 - May 31, 2026
—
€
—
—
€
896,462,543
June 1, 2026 - June 30, 2026
575,866
€
417.77
575,866
€
653,925,775
Total
1,075,866
€
417.77
575,866
€
653,925,775
(1)Represents the average price paid per share for open market repurchases.
Issuer Purchases of Equity / second-quarter 2026 open-market repurchases · Filed 04/08/2026
13.Equity and other reserves
As of June 30, 2026 and December 31, 2025, the Company had 210,241,268 and 209,485,215 ordinary shares issued and fully paid, respectively, with 4,657,063 and 3,652,688 ordinary shares held as treasury shares, respectively.
Note 13 / issued shares and treasury shares · Filed 04/08/2026
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 long-term 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 party transactions / recognized key-management compensation · Filed 10/02/2026
Related Party Transaction Policy
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 Party Transaction Policy / audit committee approval · 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 of equity plans · Filed 10/02/2026
domestic issuers. Our “named executive officers” for 2025 are: •Daniel Ek, who is our Founder, Executive Chairman, and Director, and served as our Chief Executive Officer (“CEO”) and our principal executive officer until December 31, 2025; •Alex Norström, who served as our Co-President, Chief Business Officer until he became our Co-CEO and Director, effective as of January 1, 2026; •Gustav Söderström, who served as our Co-President, Chief Product & Technology Officer until he became our Co-CEO and Director, effective as of January 1, 2026; •Christian Luiga, who serves as our Chief Financial Officer (“CFO”) and principal financial officer; and •Dustee Jenkins, who serves as our Chief Public Affairs Officer.
Executive compensation / leadership roles and January 2026 succession · Filed 10/02/2026
These metrics are calculated using internal company data and have not been validated by an independent third party.
Metrics risks / internally calculated user metrics · Filed 10/02/2026
In March 2024, the European Commission found that Apple’s conduct was illegal under the European Union (the “EU”)’s antitrust rules and fined Apple €1.84 billion.
Platform-access risks / disclosed European Commission decision concerning Apple · Filed 10/02/2026
While the decision marked a historic milestone in our ongoing efforts to stop Apple’s anticompetitive behavior, we cannot assure you that Apple will comply with the decision in ways that materially improve our business.
Platform-access risks / uncertain commercial benefit of Apple decision · Filed 10/02/2026
For the six months ended June 30, 2026 and 2025, Premium revenue comprised 91% and 90% of our total revenue, respectively.
MD&A / six-month Premium revenue share · Filed 04/08/2026
For the six months ended June 30, 2026 as compared to the six months ended June 30, 2025, Premium revenue increased €943 million, or 13%.
MD&A / six-month Premium revenue growth · Filed 04/08/2026
