Earnings release
Page 1
UNITED STATESSECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN PRIVATE ISSUERPURSUANT TO RULE 13a-16 OR 15d-16UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of November, 2025 Commission File Number: 001-38438 Spotify Technology S.A. (Translation of registrant’s name into English) 33 Boulevard Prince Henri L-1724 LuxembourgGrand Duchy of Luxembourg(Address of principal executive office) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐
Page 2
Spotify Technology S.A. Interim condensed consolidated financial statementsFor the three and nine months ended September 30, 2025
Page 3
Table of contents Page PART I - FINANCIAL INFORMATION Item 1. Financial Statements 1Interim condensed consolidated statement of operations 1Interim condensed consolidated statement of comprehensive income 2 Interim condensed consolidated statement of financial position 3Interim condensed consolidated statement of changes in equity 4Interim condensed consolidated statement of cash flows 6 Notes to the interim condensed consolidated financial statements 7Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 27Item 3. Quantitative and Qualitative Disclosures About Market Risk 40 PART II - OTHER INFORMATION Item 1. Legal Proceedings 43Item 1A. Risk Factors 43 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 43Item 3. Defaults Upon Senior Securities 43Item 5. Other Information 43 Signatures 44
Page 4
Table of Contents PART I - FINANCIAL INFORMATION Item 1. Financial Statements Interim condensed consolidated statement of operations(Unaudited)(in € millions, except share and per share data) Three months ended September 30, Nine months ended September 30, Note 2025 2024 2025 2024 Revenue 20 4,272 3,988 12,655 11,431 Cost of revenue 2,921 2,748 8,658 8,075 Gross profit 1,351 1,240 3,997 3,356 Research and development 309 342 1,103 1,110 Sales and marketing 349 332 1,027 999 General and administrative 111 112 370 359 769 786 2,500 2,468 Operating income 582 454 1,497 888 Finance income 4 262 66 422 201 Finance costs 4 (17) (122) (716) (247) Finance income/(cost) - net 245 (56) (294) (46) Income before tax 827 398 1,203 842 Income tax (benefit)/expense 5 (72) 98 165 71 Net income attributable to owners of the parent 899 300 1,038 771 Earnings per share attributable to owners of the parentBasic 6 4.36 1.49 5.06 3.86 Diluted 6 3.28 1.45 4.93 3.74 Weighted-average ordinary shares outstandingBasic 6 205,964,504 201,575,568 205,291,958 199,855,305 Diluted 6 213,789,735 207,399,501 210,636,414 206,034,643 The accompanying notes are an integral part of the interim condensed consolidated financial statements. -1-
Page 5
Table of Contents Interim condensed consolidated statement of comprehensive income(Unaudited)(in € millions) Three months ended September 30, Nine months ended September 30, Note 2025 2024 2025 2024 Net income attributable to owners of the parent 899 300 1,038 771 Other comprehensive income/(loss)Items that may be subsequently reclassified to interim condensedconsolidated statement of operations (net of tax):Net gains on short term investments 13, 19 1 8 8 7 Net (losses)/gains on cash flow hedging instruments 13, 19 (3) (1) 13 (3) Change in foreign currency translation adjustment (1) (42) (215) (14)Items not to be subsequently reclassified to interim condensedconsolidated statement of operations (net of tax):Gains/(losses) in the fair value of long term investments held atperiod-end 13, 19 374 (257) 1,002 308 Change in fair value of Exchangeable Notes due to change in theGroup’s credit risk 15, 19 — — — (4) Other comprehensive income/(loss) for the period (net of tax) 371 (292) 808 294 Total comprehensive income for the period attributable to owners of the parent 1,270 8 1,846 1,065 The accompanying notes are an integral part of the interim condensed consolidated financial statements. - 2 -
Page 6
Table of Contents Interim condensed consolidated statement of financial position(in € millions) Note September 30, 2025 December 31, 2024 (Unaudited) Assets Non-current assets Lease right-of-use assets 7 242 226 Property and equipment 8 174 188 Goodwill 9 1,078 1,201 Intangible assets 9 33 48 Long term investments 19 2,888 1,635 Restricted cash and other non-current assets 10 61 68 Finance lease receivables 7 69 74 Deferred tax assets 5 87 186 4,632 3,626 Current assets Trade and other receivables 11 735 771 Income tax receivable 117 28 Short term investments 19 3,606 2,667 Cash and cash equivalents 5,456 4,781 Other current assets 12 143 132 10,057 8,379 Total assets 14,689 12,005 Equity and liabilities Equity Share capital — — Other paid in capital 6,459 6,124 Treasury shares 13 (328) (262) Other reserves 13 3,654 2,707 Accumulated deficit (2,006) (3,044) Equity attributable to owners of the parent 7,779 5,525 Non-current liabilities Exchangeable Notes 15, 19 — 1,539 Lease liabilities 7 444 462 Accrued expenses and other liabilities 17 1 5 Provisions 18 3 3 Deferred tax liabilities 5 223 21 671 2,030 Current liabilities Trade and other payables 16 1,193 1,342 Income tax payable 31 33 Deferred revenue 692 683 Accrued expenses and other liabilities 17 2,519 2,347 Exchangeable Notes 15, 19 1,741 — Provisions 18 50 25 Derivative liabilities 19 13 20 6,239 4,450 Total liabilities 6,910 6,480 Total equity and liabilities 14,689 12,005 The accompanying notes are an integral part of the interim condensed consolidated financial statements. - 3 -
Page 7
Table of Contents Interim condensed consolidated statement of changes in equity(Unaudited)(in € millions) Note Sharecapital Other paid incapital TreasuryShares Otherreserves Accumulateddeficit Equityattributable toowners of theparent Balance at January 1, 2025 — 6,124 (262) 2,707 (3,044) 5,525 Income for the period — — — — 225 225 Other comprehensive income — — — 197 — 197 Issuance of shares upon exercise of stock options, restricted stockunits, and contingently issuable shares 13 — 204 — — — 204 Restricted stock units withheld for employee taxes — — — (60) — (60)Share-based compensation 14 — — — 42 — 42 Income tax impact associated with share-based compensation — — — 114 — 114 Balance at March 31, 2025 — 6,328 (262) 3,000 (2,819) 6,247 Loss for the period — — — — (86) (86) Other comprehensive income — — — 240 — 240 Issuance of shares upon exercise of stock options and restrictedstock units 13 — 92 — — — 92 Restricted stock units withheld for employee taxes — — — (57) — (57)Share-based compensation 14 — — — 73 — 73 Income tax impact associated with share-based compensation — — — 118 — 118 Balance at June 30, 2025 — 6,420 (262) 3,374 (2,905) 6,627 Income for the period — — — — 899 899 Other comprehensive income — — — 371 — 371 Issuance of shares upon exercise of stock options and restrictedstock units 13 — 39 — — — 39 Repurchases of ordinary shares 13 — — (66) — — (66)Restricted stock units withheld for employee taxes — — — (66) — (66)Share-based compensation 14 — — — 75 — 75 Income tax impact associated with share-based compensation — — — (100) — (100) Balance at September 30, 2025 — 6,459 (328) 3,654 (2,006) 7,779 - 4 -
Page 8
Table of Contents Note Sharecapital Other paid incapital TreasuryShares Otherreserves Accumulateddeficit Equityattributable toowners of theparent Balance at January 1, 2024 — 5,155 (262) 1,812 (4,182) 2,523 Income for the period — — — — 197 197 Other comprehensive income — — — 269 — 269 Issuance of shares upon exercise of stock options, restricted stockunits, and contingently issuable shares 13 — 242 — — — 242 Restricted stock units withheld for employee taxes — — — (27) — (27)Share-based compensation 14 — — — 69 — 69 Income tax impact associated with share-based compensation — — — 36 — 36 Balance at March 31, 2024 — 5,397 (262) 2,159 (3,985) 3,309 Income for the period — — — — 274 274 Other comprehensive income — — — 317 — 317 Issuance of shares upon exercise of stock options and restrictedstock units 13 — 240 — — — 240 Restricted stock units withheld for employee taxes — — — (33) — (33)Share-based compensation 14 — — — 81 — 81 Income tax impact associated with share-based compensation — — — 71 — 71 Balance at June 30, 2024 — 5,637 (262) 2,595 (3,711) 4,259 Income for the period — — — — 300 300 Other comprehensive loss — — — (292) — (292)Issuance of shares upon exercise of stock options and restrictedstock units 13 — 152 — — — 152 Issuance of ordinary shares upon net settlement of warrants 19 — 36 — — — 36 Restricted stock units withheld for employee taxes — — — (34) — (34) Share-based compensation 14 — — — 63 — 63 Income tax impact associated with share-based compensation — — — 149 — 149 Balance at September 30, 2024 — 5,825 (262) 2,481 (3,411) 4,633 The accompanying notes are an integral part of the interim condensed consolidated financial statements. - 5 -
Page 9
Table of Contents Interim condensed consolidated statement of cash flows(Unaudited)(in € millions) Nine months ended September 30, Note 2025 2024 Operating activities Net income 1,038 771 Adjustments to reconcile net income to net cash flowsDepreciation of property and equipment and lease right-of-use assets 7, 8 59 64 Amortization of intangible assets 9 18 27 Impairment charge on real estate assets 7, 8 8 18 Share-based compensation expense 14 190 213 Finance income 4 (422) (201)Finance costs 4 716 247 Income tax expense 5 165 71 Other 9 (1)Changes in working capital:(Increase)/decrease in trade receivables and other assets (49) 116 Increase/(decrease) in trade and other liabilities 211 (57)Increase in deferred revenue 40 61 Increase in provisions 18 22 4 Interest paid 7 (30) (27)Interest received 184 155 Income tax paid (82) (43) Net cash flows from operating activities 2,077 1,418 Investing activitiesPayment of deferred consideration pertaining to business combinations (9) (10) Purchases of property and equipment 8 (39) (11)Purchases of short term investments 19 (13,355) (3,722)Sales and maturities of short term investments 19 12,227 3,443 Change in restricted cash 10 2 1 Dividends received 4 23 18 Other (5) (7) Net cash flows used in investing activities (1,156) (288) Financing activitiesProceeds from exercise of stock options 14 335 634 Repurchases of ordinary shares 13 (58) — Payments of lease liabilities 7 (59) (57)Payments for employee taxes withheld from restricted stock unit releases 14 (181) (92) Net cash flows from financing activities 37 485 Net increase in cash and cash equivalents 958 1,615 Cash and cash equivalents at beginning of the period 4,781 3,114 Net foreign exchange losses on cash and cash equivalents (283) (41) Cash and cash equivalents at September 30 5,456 4,688 Supplemental disclosure of cash flow informationNon-cash investing and financing activities Recognition of lease right-of-use asset in exchange for lease liabilities 7 81 16 Real estate assets disposed of in exchange for finance lease receivables 7, 8 9 57 Repurchases of ordinary shares in trade and other liabilities 13 8 — Issuance of ordinary shares upon net settlement of warrants 19 — 36 The accompanying notes are an integral part of the interim condensed consolidated financial statements. - 6 -
Page 10
Table of Contents Notes to the interim condensed consolidated financial statements(Unaudited) 1. Corporate information Spotify Technology S.A. (the “Company” or “parent”) is a public limited company incorporated and domiciled in Luxembourg. The Company’s registeredoffice is 33 Boulevard Prince Henri, L-1724 Luxembourg, Grand Duchy of Luxembourg. The principal activity of the Company and its subsidiaries (collectively, the “Group,” “we,” “us,” or “our”) is audio streaming. The Group’s premium service(“Premium Service”) provides users with unlimited online and offline high-quality streaming access to its catalog of music and podcasts. In select markets, the PremiumService provides eligible users with limited online and offline streaming access to its catalog of audiobooks. The Premium Service offers a music listening experiencewithout commercial breaks. The Group’s ad-supported service (“Ad-Supported Service,” and together with the Premium Service and other subscription offerings, the“Service”) has no subscription fees and provides users with limited on-demand online access to the catalog of music and unlimited online and offline access to thecatalog of podcasts. The Group depends on securing content licenses from a number of major and minor content owners and other rights holders in order to provide itsservice. 2. Basis of preparation and summary of material accounting policies The interim condensed consolidated financial statements of Spotify Technology S.A. for the three and nine months ended September 30, 2025 and 2024 havebeen prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”). The interim financialinformation is unaudited. The interim financial information reflects all normal recurring adjustments that are, in the opinion of management, necessary to fairly presentthe information set forth herein. The interim condensed consolidated financial statements should be read in conjunction with the Group’s consolidated financialstatements for the year ended December 31, 2024, as they do not include all the information and disclosures required in the annual consolidated financial statements.Interim results are not necessarily indicative of the results for a full year. Certain prior period balances have been reclassified to conform to current period presentation.The interim condensed consolidated financial statements are presented in millions of Euros. New and amended standards and interpretations adopted by the Group There are no new International Financial Reporting Standards (“IFRS”) or IFRS Interpretation Committee (“IFRIC”) interpretations effective during the ninemonths ended September 30, 2025 that have a material impact to the interim condensed consolidated financial statements. New standards and interpretations issued not yet effective Presentation and Disclosure in Financial Statements - IFRS 18 In April 2024, the IASB issued IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”), which replaces IAS 1 Presentation of FinancialStatements. IFRS 18 requires an entity to classify all income and expenses within its statement of profit or loss into one of five categories: operating; investing;financing; income taxes; and discontinued operations. The first three categories are new. These categories are complemented by the requirement to present subtotals andtotals for “operating profit or loss,” “profit or loss before financing income and taxes,” and “profit or loss.” IFRS 18, and the amendments to the other standards, areeffective for reporting periods beginning on or after January 1, 2027, but earlier application is permitted. The Group is currently evaluating the impact of this newstandard. - 7 -
Page 11
Table of Contents Classification and Measurement of Financial Instruments - Amendments to IFRS 9 and IFRS 7 In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7, Amendments to the Classification and Measurement of Financial Instruments. Theamendments clarify that a financial liability is derecognized on the “settlement date,” which is when the related obligation is discharged, canceled, expired or theliability otherwise qualifies for derecognition. The amendments also clarify how to assess the contractual cash flow characteristics of financial assets that includeenvironmental, social and governance (“ESG”)-linked features and other similar contingent features, and the treatment of non-recourse assets and contractually linkedinstruments. In addition, the amendments require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingentevent (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income/(loss). The amendments will beeffective for annual reporting periods beginning on or after January 1, 2026, but earlier application is permitted. The Group is currently evaluating the impact of theseamendments. There are no other IFRS or IFRIC interpretations that are not yet effective and that are expected to have a material impact to the interim condensedconsolidated financial statements. 3. Critical accounting estimates and judgments In preparing these interim condensed consolidated financial statements, the significant judgments made by management in applying the Group’s accountingpolicies and the key sources of estimation and uncertainty were the same as those applied to the consolidated financial statements for the year ended December 31,2024. Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future events. 4. Finance income and costs Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in € millions) Finance income Fair value movements on Exchangeable Notes (Note 19) 197 — 197 — Interest income 57 59 181 156 Interest income on finance lease receivables (Note 7) 2 2 6 4 Dividend income from investments held at period-end 1 — 23 18 Other finance income 5 5 15 15 Foreign exchange gains — — — 8 Total 262 66 422 201 Finance costsFair value movements on derivative liabilities (Note 19) — (7) — (33) Fair value movements on Exchangeable Notes (Note 19) — (67) (601) (145)Interest expense on lease liabilities (8) (9) (24) (27)Other finance costs — (2) (9) (5) Foreign exchange losses (9) (37) (82) (37) Total (17) (122) (716) (247) 5. Income tax The effective tax rates for the three months ended September 30, 2025 and 2024 were (8.7)% and 24.5%, respectively. The effective tax rates for the ninemonths ended September 30, 2025 and 2024 were 13.8% and 8.4%, respectively. The Group operates in a global environment with significant operations in variousjurisdictions outside Luxembourg. Accordingly, the consolidated effective tax rate is a composite rate reflecting the Group’s earnings and the applicable tax rates in thevarious jurisdictions where the Group operates. - 8 -
Page 12
Table of Contents The effective tax rate for the three months ended September 30, 2025 is lower than the Luxembourg statutory rate of 23.87%, primarily driven by a €202million benefit relating to the impact of acceleration of the deduction of the previously capitalized and unamortized domestic Section 174 research and development(“R&D”) costs. Additionally there was a benefit of €50 million relating to the change in non-deductible losses associated with the Exchangeable Notes. The effective tax rate for the three months ended September 30, 2024 of 24.5% was not materially different from the Luxembourg statutory rate of 24.94%. The effective tax rate for the nine months ended September 30, 2025 is lower than the Luxembourg statutory rate of 23.87%, primarily driven by a benefit of€198 million relating to the impact of acceleration of the deduction of the previously capitalized and unamortized domestic Section 174 R&D costs. This was offset by€103 million of expense relating to the change in non-deductible losses associated with the Exchangeable Notes. The effective tax rate for the nine months ended September 30, 2024 was lower than the Luxembourg statutory rate of 24.94%, primarily due to a €100 milliontax benefit for change in deferred tax recognition in Sweden offset by €31 million of expense related to the impact of the Spotify USA Inc. position on the capitalizationof Section 174 R&D costs during the period. Additionally there was €29 million of expense relating to the tax treatment of share-based compensation and fair valueadjustments. Transactions recorded through other comprehensive income/(loss) have been shown net of their tax impact, as applicable. The Group is in scope of the OECD Pillar Two Model Rules (“P2 Rules”). The impact of exposure to Pillar Two income taxes is not material based on themost recently available financial information of the Group. The transitional safe harbor relief is expected to apply to the majority of our subsidiary jurisdictions. We are subject to ongoing tax audits in several jurisdictions, some of which involve tax matters related to transfer pricing, direct taxes, or withholding taxes.Tax authorities in certain jurisdictions have challenged our tax positions. We regularly assess the likely outcomes of these audits, taking into account any newinformation available, in order to determine the appropriateness of the tax reserves. If management concludes that it is not probable that a tax position will be accepted,the effect of that uncertainty is reflected at either the most likely amount or the expected value, taking into account a range of possible outcomes. Tax provisions related to uncertain tax positions, which management has concluded are not probable to be accepted, were €27 million as of September 30,2025 and €29 million as of December 31, 2024. None of the provisions related to uncertain tax positions are reasonably expected to be resolved within the next 12months. Interest and penalties included in income tax expense were not material in any of the periods presented. Due to the uncertainty associated with our taxpositions, any future agreement with the tax authorities could have a significant impact on our results of operations, financial condition, and cash flows. Net deferred tax liabilities of €136 million and net deferred tax assets of €165 million were recorded as of September 30, 2025 and December 31, 2024,respectively. In evaluating the probability of realizing the deferred tax assets, the Group considered all available positive and negative evidence of future taxable profit.As of September 30, 2025 and December 31, 2024, deferred tax assets of €753 million and €818 million have not been recognized. Changes in profitability, in thejurisdictions where these balances originated, among other factors, could have a substantial impact on management’s assessment of deferred tax recognition. We believe it is possible that within the next 12 months sufficient positive evidence will exist to support the recognition of U.S. Federal and State deferred taxassets. As of September 30, 2025 the total unrecognized balance in the U.S. was €713 million. The exact timing and amount of recognition is dependent on variousfactors including, but not limited to, the level of profitability and the level of benefit from share-based compensation deductions in future periods. The recognition ofU.S. deferred tax assets would result in an income tax benefit in the consolidated statement of operations as well as a credit to equity recorded in the quarter in whichthe determination is made. - 9 -
Page 13
Table of Contents 6. Earnings per share Basic earnings per share is computed using the weighted-average number of outstanding ordinary shares during the period. Diluted earnings per share iscomputed using the weighted-average number of outstanding ordinary shares and potential outstanding ordinary shares during the period. Potential ordinary shares,which are based on the weighted-average ordinary shares underlying outstanding stock options, restricted stock units, other contingently issuable shares, warrants, andExchangeable Notes and computed using the treasury stock method or the if-converted method, as applicable, are included when calculating diluted earnings per sharewhen their effect is dilutive. The computation of earnings per share for the respective periods is as follows: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in € millions, except share and per share data) Basic earnings per share Net income attributable to owners of the parent 899 300 1,038 771 Shares used in computation:Weighted-average ordinary shares outstanding 205,964,504 201,575,568 205,291,958 199,855,305 Basic earnings per share attributable to owners of the parent 4.36 1.49 5.06 3.86 Diluted earnings per shareNet income attributable to owners of the parent 899 300 1,038 771 Fair value gains on dilutive Exchangeable Notes (197) — — — Net income used in the computation of diluted earnings per share 702 300 1,038 771 Shares used in computation: Weighted-average ordinary shares outstanding 205,964,504 201,575,568 205,291,958 199,855,305 Exchangeable Notes 2,911,498 — — — Stock options 3,614,107 3,989,363 3,898,154 4,199,714 Restricted stock units 1,292,184 1,814,968 1,436,221 1,958,491 Other contingently issuable shares 7,442 19,602 10,081 21,133 Diluted weighted-average ordinary shares 213,789,735 207,399,501 210,636,414 206,034,643 Diluted earnings per share attributable to owners of the parent 3.28 1.45 4.93 3.74 Potential dilutive securities that were not included in the diluted earnings per share calculations because they would be anti-dilutive were as follows: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Stock options 335,500 930,629 339,134 1,398,556 Restricted stock units — — 17,738 72,416 Exchangeable Notes — 2,911,500 2,911,483 2,911,500 - 10 -
Page 14
Table of Contents 7. Leases The Group leases certain properties under non-cancellable lease agreements that primarily relate to office space. The expected lease terms are up to 11 years. Below is the roll-forward of lease right-of-use assets: Right-of-use assets (in € millions) Cost At January 1, 2025 597 Increases 81 Decreases (60)Exchange differences (40) At September 30, 2025 578 Accumulated depreciation and impairment lossAt January 1, 2025 (371) Depreciation charge (31)Impairment charge (5)Decreases 51 Exchange differences 20 At September 30, 2025 (336) Cost, net accumulated depreciation and impairment lossAt January 1, 2025 226 At September 30, 2025 242 Below is the roll-forward of lease liabilities: Lease liabilities 2025 2024 (in € millions) At January 1 537 558 Increases 85 16 Payments (84) (84) Interest expense 24 27 Decreases (9) — Exchange differences (48) (3) At September 30 505 514 (1) €25 million and €27 million of interest paid on lease liabilities are included in operating activities and €59 million and €57 million of payments of lease liabilities are included in financing activitieswithin the interim condensed consolidated statement of cash flows for the nine months ended September 30, 2025 and 2024, respectively. (1) - 11 -
Page 15
Table of Contents Below is the maturity analysis of lease liabilities: Lease liabilities September 30, 2025 Maturity Analysis (in € millions) Less than one year 90 One to five years 299 More than five years 249 Total lease commitments 638 Impact of discounting remaining lease payments (133)Total lease liabilities 505 Lease liabilities included in the interim condensed consolidated statement of financial position Current 61 Non-current 444 Total 505 Excluded from the lease commitments above are short term leases. Expenses relating to short term leases were approximately €1 million for both the threemonths ended September 30, 2025 and 2024, and €4 million and €3 million for the nine months ended September 30, 2025 and 2024, respectively. Additionally, theGroup has entered into certain lease agreements with approximately €52 million of commitments, which had not commenced as of September 30, 2025, and, as such,have not been recognized in the interim condensed consolidated statement of financial position. The weighted-average incremental borrowing rate applied to lease liabilities recognized in the interim condensed consolidated statement of financial positionas of September 30, 2025 was 5.8%. The Group has entered into agreements to sublease a portion of its leased offices under finance leases. Below is the roll-forward of finance lease receivables: Finance lease receivables 2025 2024 (in € millions) At January 1 76 — Additions 9 63 Interest income 6 4 Payments received (2) (1)Exchange differences (8) (1) At September 30 81 65 Below is the maturity analysis of finance lease receivables: Finance lease receivables September 30, 2025 Maturity Analysis (in € millions) Less than one year 13 One to five years 58 More than five years 45 Total lease payments receivable 116 Unearned finance income (35) Total finance lease receivables 81 Finance lease receivables included in the interim condensed consolidated statement of financial position Current 12 Non-current 69 Total 81 - 12 -
Page 16
Table of Contents 8. Property and equipment Property and equipment Leaseholdimprovements Total (in € millions) Cost At January 1, 2025 101 394 495 Additions 29 10 39 Disposals (4) (26) (30) Exchange differences (7) (33) (40) At September 30, 2025 119 345 464 Accumulated depreciation and impairment lossAt January 1, 2025 (87) (220) (307)Depreciation charge (5) (23) (28) Impairment charge — (3) (3)Disposals 4 21 25 Exchange differences 6 17 23 At September 30, 2025 (82) (208) (290) Cost, net accumulated depreciation and impairment loss At January 1, 2025 14 174 188 At September 30, 2025 37 137 174 The Group had €25 million and €7 million of property and equipment and leasehold improvements that were not placed into service as of September 30,2025 and December 31, 2024, respectively. - 13 -
Page 17
Table of Contents 9. Goodwill and intangible assets Internaldevelopmentcosts andpatents Acquiredintangibleassets Total Goodwill Total (in € millions) Cost At January 1, 2025 64 141 205 1,201 1,406 Additions 4 — 4 — 4 Derecognition of fully amortized intangibles (32) (1) (33) — (33) Exchange differences — (12) (12) (123) (135) At September 30, 2025 36 128 164 1,078 1,242 Accumulated amortizationAt January 1, 2025 (56) (101) (157) — (157)Amortization charge (3) (15) (18) — (18) Derecognition of fully amortized intangibles 32 1 33 — 33 Exchange differences — 11 11 — 11 At September 30, 2025 (27) (104) (131) — (131) Cost, net accumulated amortizationAt January 1, 2025 8 40 48 1,201 1,249 At September 30, 2025 9 24 33 1,078 1,111 Amortization charges related to intangible assets of €5 million and €7 million are included in research and development in the interim condensed consolidatedstatement of operations during the three months ended September 30, 2025 and 2024, respectively. Amortization charges related to intangible assets of €16 million and€22 million are included in research and development in the interim condensed consolidated statement of operations during the nine months ended September 30, 2025and 2024, respectively. There were no impairment charges for goodwill or intangible assets for the three and nine months ended September 30, 2025 and 2024,respectively. 10. Restricted cash and other non-current assets September 30, 2025 December 31, 2024 (in € millions) Restricted cash Lease deposits and guarantees 42 50 Other 1 2 Other non-current assets 18 16 Total 61 68 11. Trade and other receivables September 30, 2025 December 31, 2024 (in € millions) Trade receivables 516 543 Less: allowance for expected credit losses (5) (3)Trade receivables - net 511 540 Other receivables 224 231 Total 735 771 - 14 -
Page 18
Table of Contents 12. Other current assets September 30, 2025 December 31, 2024 (in € millions) Content assets 31 47 Prepaid expenses and other 89 71 Derivative assets 23 14 Total 143 132 Content asset amortization of €29 million and €51 million is included in cost of revenue in the interim condensed consolidated statement of operations for thethree months ended September 30, 2025 and 2024, respectively. Content asset amortization of €95 million and €154 million is included in cost of revenue in the interimcondensed consolidated statement of operations for the nine months ended September 30, 2025 and 2024, respectively. 13. Equity and other reserves As of September 30, 2025 and December 31, 2024, the Company had 208,985,215 and 207,475,133 ordinary shares issued and fully paid, respectively, with2,901,506 and 3,630,724 ordinary shares held as treasury shares, respectively. On August 20, 2021, the Company announced that the board of directors had approved a program to repurchase up to US$1.0 billion of the Company’sordinary shares. On July 29, 2025, the Company announced that the board of directors had approved an increase in the Company’s share repurchase program by anadditional US$1.0 billion. Repurchases of up to 10,000,000 of the Company’s ordinary shares were authorized at the Company’s general meeting of shareholders onApril 21, 2021. The authorization to repurchase will expire on April 21, 2026 unless renewed by decision of a general meeting of shareholders of the Company. As ofSeptember 30, 2025, the Company repurchased 581,404 shares for €157 million under this program. The Company repurchased 112,130 shares for €66 million (US$77million) during the three and nine months ended September 30, 2025. As of September 30, 2025, the maximum value of shares that may yet be purchased under theshare repurchase program is approximately US$1,819 million. For the three and nine months ended September 30, 2025, the Company issued and repurchased 500,000 and 1,500,000 of its own ordinary shares,respectively, from its Netherlands subsidiary at par value. For the three and nine months ended September 30, 2025, the Company reissued 418,078 and 2,341,348treasury shares, respectively, upon the exercise of stock options and release of restricted stock units. For the three and nine months ended September 30, 2024, the Company issued and repurchased 1,000,000 and 3,900,000 of its own ordinary shares,respectively, from its Netherlands subsidiary at par value. For the three and nine months ended September 30, 2024, the Company reissued 1,151,583 and 4,803,753treasury shares, respectively, upon the exercise of stock options and release of restricted stock units. On July 25, 2024, the Company issued 118,891 ordinary shares and 1,188,910 beneficiary certificates upon the net settlement of 800,000 outstanding warrants.See Note 19 for information regarding the warrants. As of September 30, 2025 and December 31, 2024, the Group’s founders held 309,932,980 and 324,732,980 beneficiary certificates, respectively. - 15 -
Page 19
Table of Contents Other reserves 2025 2024 (in € millions) Currency translation At January 1 150 63 Currency translation (215) (14) At September 30 (65) 49 Short term investmentsAt January 1 (7) (4)Gains on fair value that may be subsequently reclassified to interim condensed consolidated statement of operations 12 7 (Gains)/Losses reclassified to interim condensed consolidated statement of operations (1) 2 Deferred tax (3) (2) At September 30 1 3 Long term investmentsAt January 1 553 224 Gains on fair value of investments held at period-end not to be subsequently reclassified to interim condensed consolidatedstatement of operations 1,262 389 Deferred tax (260) (81) At September 30 1,555 532 Exchangeable Notes At January 1 (13) (7)Losses on fair value attributable to changes in credit risk — (5) Deferred tax — 1 At September 30 (13) (11) Cash flow hedgesAt January 1 (5) (3) Gains/(Losses) on fair value that may be subsequently reclassified to interim condensed consolidated statement ofoperations 18 (9)(Gains)/Losses reclassified to revenue (19) 18 Losses/(Gains) reclassified to cost of revenue 17 (13)Deferred tax (3) 1 At September 30 8 (6) Share-based compensationAt January 1 2,029 1,539 Share-based compensation 190 213 Income tax impact associated with share-based compensation 132 256 Restricted stock units withheld for employee taxes (183) (94) At September 30 2,168 1,914 Other reserves at September 30 3,654 2,481 14. Share-based compensation The expense recognized in the interim condensed consolidated statement of operations for share-based compensation is as follows: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in € millions) Cost of revenue 1 1 3 4 Research and development 43 36 107 122 Sales and marketing 18 14 48 48 General and administrative 13 12 32 39 Total 75 63 190 213 - 16 -
Page 20
Table of Contents Activity in the Group’s RSUs and other contingently issuable shares outstanding and related information is as follows: RSUs Other Number ofRSUs Weightedaveragegrant datefair value Number ofAwards Weightedaveragegrant datefair value US$ US$ Outstanding at January 1, 2025 2,020,372 168.81 22,302 156.93 Granted 430,977 605.55 — — Forfeited (129,009) 190.36 — — Released (760,024) 178.32 (14,596) 154.15 Outstanding at September 30, 2025 1,562,316 282.88 7,706 162.21 In the table above, the number of RSUs and other contingently issuable shares released include ordinary shares that the Group has withheld for settlement ofemployees’ tax obligations due upon the vesting of RSUs and other contingently issuable shares. For most of our employees, when RSUs vest, the Group withholds thenumber of shares that are equal to the monetary value of the employee’s tax obligation from the total number of shares that otherwise would have been issued. TheGroup then remits cash to tax authorities on the employees’ behalf. If all the RSUs outstanding at September 30, 2025 subsequently vest, the Group estimates that itwould be required to remit approximately €362 million to tax authorities over the vesting period for the years 2025 through 2029. In determining this estimate, theGroup used the Company’s ordinary share price as at September 30, 2025. The actual amount remitted to tax authorities is dependent on the Company’s ordinary shareprice on each of the vesting dates, as well as the number of awards that ultimately vest. Activity in the Group’s stock options outstanding and related information is as follows: Options Number ofoptions Weightedaverageexercise price US$ Outstanding at January 1, 2025 6,690,427 170.49 Granted 339,651 648.02 Forfeited (159,913) 186.90 Exercised (1,915,158) 190.83 Expired (5,188) 172.16 Outstanding at September 30, 2025 4,949,819 194.85 Exercisable at January 1, 2025 2,520,115 189.66 Exercisable at September 30, 2025 2,428,599 170.81 The weighted-average contractual life for the stock options outstanding at September 30, 2025 was 2.2 years. The weighted-average share price at exercise foroptions exercised during the nine months ended September 30, 2025 was US$633.82. The weighted-average fair value of options granted during the nine months endedSeptember 30, 2025 was US$227.22 per option. The following table lists the inputs to the Black-Scholes option-pricing models used for share-based compensation for the three and nine months endedSeptember 30, 2025 and 2024: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Expected volatility (%) 42.2 - 48.9 51.6 - 56.5 42.2 - 54.0 51.6 - 57.6 Risk-free interest rate (%) 3.6 - 3.8 3.7 - 4.7 3.6 - 4.4 3.7 - 4.9Expected life of stock options (years) 2.6 - 4.8 2.6 - 4.8 2.6 - 4.8 2.6 - 4.8Weighted-average share price (US$) 684.30 339.12 606.73 270.10 - 17 -
Page 21
Table of Contents 15. Exchangeable Notes On March 2, 2021, the Company’s wholly owned subsidiary, Spotify USA Inc. (the “Issuer”), issued US$1,500 million aggregate principal amount of 0%Exchangeable Senior Notes due 2026 (the “Exchangeable Notes”), which included the initial purchasers’ exercise in full of their option to purchase an additionalUS$200 million principal amount of the Exchangeable Notes. The Exchangeable Notes will mature on March 15, 2026, unless earlier repurchased, redeemed orexchanged. As of September 30, 2025, the Exchangeable Notes are classified within current liabilities in the interim condensed consolidated statement of financialposition. The Exchangeable Notes are fully and unconditionally guaranteed on a senior, unsecured basis by the Company. The net proceeds from the issuance of the Exchangeable Notes were €1,223 million after deducting transaction costs of €18 million. The transaction costs wereimmediately expensed and included in finance costs in the interim condensed consolidated statement of operations for the three months ended March 31, 2021. The Exchangeable Notes are the Issuer’s senior unsecured obligations and are equal in right of payment with the Issuer’s future senior, unsecuredindebtedness, senior in right of payment to the Issuer’s future indebtedness that is expressly subordinated to the Exchangeable Notes and effectively subordinated to theIssuer’s future secured indebtedness, to the extent of the value of the collateral securing that indebtedness. The Exchangeable Notes will be structurally subordinated toall future indebtedness and other liabilities, including trade payables, and (to the extent the Issuer is not a holder thereof) preferred equity, if any, of the Issuer’ssubsidiaries. The noteholders may exchange their Exchangeable Notes at their option into consideration that consists, at the Issuer’s election, of cash, ordinary shares of theCompany, or a combination of cash and ordinary shares, but only under certain circumstances as set forth in the indenture governing the Exchangeable Notes (the“Indenture”). The circumstances required to allow the noteholders to exchange their Exchangeable Notes were met as of June 30, 2025 and September 30, 2025. TheExchangeable Notes are exchangeable through close of business on March 12, 2026. The Exchangeable Notes were not redeemable prior to March 20, 2024, except in the event of certain tax law changes as set forth in the Indenture. SinceMarch 20, 2024, the Exchangeable Notes are redeemable, in whole or in part, at the Issuer’s option at any time, and from time to time, and on or before the 40thscheduled trading day immediately before the maturity date, at a cash redemption price equal to the principal amount of the Exchangeable Notes to be redeemed, plusaccrued and unpaid special and additional interest, if any, but only if the last reported sale price per ordinary share exceeds 130% of the exchange price on: (1) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediatelybefore the date the Issuer sends the related redemption notice; and (2) the trading day immediately before the date the Issuer sends such notice. The circumstances required to allow the Issuer to redeem the Exchangeable Notes were met as of September 30, 2025. In addition, the Issuer will have the right to redeem all, but not less than all, of the Exchangeable Notes if certain changes in tax law as set forth in theIndenture occur. In addition, calling any Exchangeable Note for redemption will constitute a make-whole fundamental change with respect to that Exchangeable Note,in which case the exchange rate applicable to the exchange of that Exchangeable Note will be increased in certain circumstances if it is exchanged after it is called forredemption. Upon the occurrence of a “fundamental change” as set forth in the Indenture, noteholders may require the Issuer to repurchase their Exchangeable Notes at acash repurchase price equal to the principal amount of the Exchangeable Notes to be repurchased, plus accrued and unpaid special and additional interest, if any, to, butexcluding, the fundamental change repurchase date as set forth in the Indenture. The Group accounted for the Exchangeable Notes at fair value through profit and loss using the fair value option in accordance with IFRS 9, FinancialInstruments. The fair value of the Exchangeable Notes as of September 30, 2025 was €1,741 million. See Note 19 for information regarding the key inputs andassumptions used to estimate the fair value of the Exchangeable Notes. During the three months and nine months ended September 30, 2025, noteholders of a portion of the Group’s Exchangeable Notes exchanged US$9 thousandin principal of Exchangeable Notes. The Exchangeable Notes that were exchanged were settled in cash at the Group's election. - 18 -
Page 22
Table of Contents 16. Trade and other payables September 30, 2025 December 31, 2024 (in € millions) Trade payables 802 933 Value added tax and sales taxes payable 357 335 Other current liabilities 34 74 Total 1,193 1,342 17. Accrued expenses and other liabilities September 30, 2025 December 31, 2024 (in € millions) Non-current Other accrued liabilities 1 5 Total 1 5 CurrentAccrued fees to rights holders 1,849 1,695 Accrued salaries, vacation, severance, and related taxes 109 119 Accrued social costs for options and RSUs 285 217 Other accrued expenses 215 241 Lease liabilities 61 75 Total 2,519 2,347 18. Provisions Legalcontingencies Other Total (in € millions) Carrying amount at January 1, 2025 16 12 28 Charged/(credited) to the interim condensed statement of operations:Additional provisions 4 29 33 Utilized — (2) (2)Reversal of unutilized amounts — (3) (3)Exchange differences (1) (2) (3) Carrying amount at September 30, 2025 19 34 53 As at January 1, 2025 Current portion 16 9 25 Non-current portion — 3 3 As at September 30, 2025 Current portion 19 31 50 Non-current portion — 3 3 - 19 -
Page 23
Table of Contents Legal contingencies Various legal actions, proceedings, and claims are pending or may be instituted or asserted against the Group. The results of such legal proceedings are difficultto predict and the extent of the Group’s financial exposure is difficult to estimate. The Group records a provision for contingent losses when it is both probable that aliability has been incurred, and the amount of the loss can be reasonably estimated. As of April 2019, Spotify USA Inc.’s settlement of the Ferrick et al. v. Spotify USA Inc., No. 1:16-cv-8412-AJN (S.D.N.Y.), putative class action lawsuit,which alleged that Spotify USA Inc. unlawfully reproduced and distributed musical compositions without obtaining licenses, was final and effective. Even with theeffectiveness of the settlement, we may still be subject to claims of copyright infringement by rights holders who have purported to opt out of the settlement or whomay not otherwise be covered by its terms. The Music Modernization Act of 2018 contains a limitation of liability with respect to such lawsuits filed on or after January1, 2018. Rights holders may, nevertheless, file lawsuits, and may argue that they should not be bound by this limitation of liability. For example, in August 2019, theEight Mile Style, LLC et al v. Spotify USA Inc., No. 3:19-cv-00736-AAT, lawsuit was filed against Spotify USA Inc. in the U.S. District Court for the Middle District ofTennessee, alleging both that Spotify USA Inc. does not qualify for the limitation of liability in the Music Modernization Act and that the limitation of liability isunconstitutional and, thus, not valid law. In August 2024, the court granted partial summary judgment for Spotify USA Inc. against Eight Mile Style, LLC, holding thatall of Eight Mile Style’s claims are barred. Eight Mile Style has appealed. Other The Group has provisions that relate primarily to potential tax obligations other than income tax in various jurisdictions. The Group recognizes provisions forclaims on taxes other than income tax when it determines that an unfavorable outcome is probable and the amount of loss can be reasonably estimated. 19. Financial instruments Foreign exchange forward contracts Cash flow hedges The Group’s currency pairs used for cash flow hedges are Euro / U.S. dollar, Euro / Australian dollar, Euro / British pound, Euro / Swedish krona, Euro /Canadian dollar, and Euro / Norwegian krone. The notional principal of foreign exchange contracts hedging the revenue and cost of revenue line items in the interimcondensed consolidated statement of operations was approximately €1,705 million and €1,034 million, respectively, as of September 30, 2025, and approximately€1,609 million and €1,014 million, respectively, as of December 31, 2024. Fair values The carrying amounts of certain financial instruments, including cash and cash equivalents, trade and other receivables, restricted cash, trade and otherpayables, and accrued expenses and other liabilities approximate fair value due to their relatively short maturities. Refer to the consolidated financial statements for theyear ended December 31, 2024 for information regarding the Group’s measurement of its finance lease receivables. The carrying amount of our finance leasereceivables is considered to approximate their fair value at September 30, 2025. Refer to the consolidated financial statements for the year ended December 31, 2024 forinformation regarding the Group’s measurement of its lease liabilities. All other financial assets and liabilities are accounted for at fair value. - 20 -
Page 24
Table of Contents The following tables summarize, by major security type, the Group’s financial assets and liabilities that are measured at fair value on a recurring basis, and thecategory using the fair value hierarchy: Quoted Prices inActiveMarkets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) SignificantUnobservable Inputs(Level 3) September 30, 2025 (in € millions) Financial assets at fair value Cash equivalents:Money market funds 3,452 — — 3,452 Short term investments: Money market funds 822 — — 822 Government securities 347 — — 347 Agency securities — 2 — 2 Corporate notes — 539 — 539 Collateralized reverse purchase agreements — 1,580 — 1,580 Fixed income funds 316 — — 316 Derivatives (designated for hedging):Foreign exchange forwards — 23 — 23 Long term investments 2,813 — 75 2,888 Total financial assets at fair value by level 7,750 2,144 75 9,969 Financial liabilities at fair value Exchangeable Notes — — 1,741 1,741 Derivatives (designated for hedging):Foreign exchange forwards — 13 — 13 Total financial liabilities at fair value by level — 13 1,741 1,754 - 21 -
Page 25
Table of Contents Quoted Prices inActiveMarkets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) SignificantUnobservable Inputs(Level 3) December 31, 2024 (in € millions) Financial assets at fair value Cash equivalents:Money market funds 3,550 — — 3,550 Short term investments: Money market funds 263 — — 263 Government securities 676 9 — 685 Corporate notes — 908 — 908 Collateralized reverse purchase agreements — 695 — 695 Fixed income funds 116 — — 116 Derivatives (designated for hedging): Foreign exchange forwards — 14 — 14 Long term investments 1,550 — 85 1,635 Total financial assets at fair value by level 6,155 1,626 85 7,866 Financial liabilities at fair valueExchangeable Notes — — 1,539 1,539 Derivatives (designated for hedging):Foreign exchange forwards — 20 — 20 Total financial liabilities at fair value by level — 20 1,539 1,559 The Group’s policy is to recognize transfers into and transfers out of fair value hierarchy levels at the end of each reporting period. During the nine monthsended September 30, 2025, there were no transfers between levels in the fair value hierarchy. Recurring fair value measurements Long term investment - Tencent Music Entertainment Group The Group’s approximate 9% investment in Tencent Music Entertainment Group (“TME”) is carried at fair value through other comprehensive income/(loss).The fair value of ordinary shares of TME is based on the ending New York Stock Exchange American depository share price. The fair value of the investment in TMEmay vary over time and is subject to a variety of risks including company performance, macro-economic, regulatory, industry, USD to Euro exchange rate and systemicrisks of the equity markets overall. The table below presents the changes in the investment in TME: 2025 2024 (in € millions) At January 1 1,550 1,154 Changes in fair value recorded in other comprehensive income/(loss) 1,263 376 At September 30 2,813 1,530 A 10% decrease or increase in TME’s share price would have resulted in a fair value of the Group’s long term investment in TME ranging from €2,532 millionto €3,094 million at September 30, 2025. The following sections describe the valuation methodologies the Group uses to measure its Level 3 financial instruments at fair value on a recurring basis. - 22 -
Page 26
Table of Contents Long term investments - other The Group has interests in certain long term investments, the most significant of which is our equity investment in DistroKid, an independent digital musicdistribution service. These long term investments primarily represent unlisted equity securities carried at fair value through other comprehensive income/(loss). The fairvalues of these equity investments are generally determined using business enterprise values based on market transactions or by applying market multiples to theprojected financial performance. The key assumption used to estimate the fair value of these equity investments include market multiples of revenue or earnings beforeinterest, income taxes, depreciation and amortization for benchmark companies used to estimate business enterprise value. The fair value of the long term investments may vary over time and is subject to a variety of risks including company performance, macroeconomic,regulatory, industry, USD to Euro exchange rate, and systemic risks of the overall equity markets. The table below presents the changes in the other long term investments: 2025 2024 (in € millions) At January 1 85 61 Initial recognition of long term investments 1 1 Changes in fair value recorded in other comprehensive income/(loss) for investments held at period-end (1) 13 Changes in fair value recognized in interim condensed consolidated statement of operations (1) 2 Return of capital — (2)Effect of changes in foreign exchange rates (9) (1) At September 30 75 74 Warrants On July 25, 2024, the Company issued 118,891 ordinary shares and 1,188,910 beneficiary certificates to Daniel Ek, the Company’s Chief Executive Officer,through D.G.E. Investments Limited, an entity indirectly wholly owned by him, upon the net settlement of the 800,000 warrants that were granted on August 23, 2021. As of September 30, 2025 and December 31, 2024, there were no outstanding warrants. The table below presents the changes in the warrants liability: 2025 2024 (in € millions) At January 1 — 3 Changes in fair value recognized in interim condensed consolidated statement of operations — 33 Issuance of ordinary shares upon net settlement of warrants — (36) At September 30 — — - 23 -
Page 27
Table of Contents Exchangeable Notes The table below presents the changes in the Exchangeable Notes: 2025 2024 (in € millions) At January 1 1,539 1,203 Changes in fair value recognized in interim condensed consolidated statement of operations 404 145 Changes in fair value recorded in other comprehensive income/(loss) — 5 Effect of changes in foreign exchange rates (202) (13) At September 30 1,741 1,340 The change in estimated fair value is recognized within finance income/costs in the interim condensed consolidated statement of operations, excluding changesin fair value due to changes in the Group’s own credit risk, which are recognized in other comprehensive income/(loss) and will not be reclassified to the interimcondensed consolidated statement of operations. The fair value of the Exchangeable Notes was estimated using a combination of a binomial option pricing model and prices observed for the ExchangeableNotes in an over-the-counter market on the last trading day of the reporting period. As of September 30, 2025, a weight of 50% was applied to the binomial optionpricing model and a weight of 50% was applied to the price of the Exchangeable Notes in the over-the-counter market on the last trading day of the reporting period.The key assumptions used in the binomial option pricing model for the Exchangeable Notes were as follows: September 30, 2025 Risk free rate (%) 3.86 Discount rate (%) 5.63Volatility (%) 45.0Share price (US$) 698.00 A decrease or increase of 10 percentage points in volatility would have resulted in a fair value of the Exchangeable Notes ranging from €1,731 million to€1,753 million at September 30, 2025. A 10% decrease or increase in the Company’s ordinary share price would have resulted in a fair value of the Exchangeable Notesranging from €1,667 million to €1,820 million at September 30, 2025. A decrease or increase of 100 basis points in credit spread would have resulted in a fair value ofthe Exchangeable Notes ranging from €1,741 million to €1,740 million at September 30, 2025. 20. Segment information The Group has two reportable segments: Premium and Ad-Supported. Revenue for the Premium segment is generated primarily through subscription fees.Revenue for the Ad-Supported segment is generated primarily through the sale of advertising across the Group’s music and podcast content. Royalty costs are primarilyrecorded in each segment based on specific rates for each segment agreed to with rights holders. All podcast content costs were recorded in the Ad-Supported segmentprior to 2025. Beginning in 2025, as part of the Spotify Partner Program initiative, an enhanced video podcast experience was launched for subscribers to our PremiumService. Podcast content costs attributable to this new experience for subscribers to our Premium Service are recorded in the Premium segment. The costs of providingaudiobook content as part of a subscription are recorded in the Premium segment. The remaining costs that are not specifically associated with either of the segmentsare allocated based on user activity or the revenue recognized in each segment. No operating segments have been aggregated to form the reportable segments. - 24 -
Page 28
Table of Contents Key financial performance measures of the segments including revenue, cost of revenue, and gross profit, are as follows: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in € millions) Premium Revenue 3,826 3,516 11,337 10,114 Cost of revenue 2,557 2,338 7,569 6,906 Gross profit 1,269 1,178 3,768 3,208 Ad-SupportedRevenue 446 472 1,318 1,317 Cost of revenue 364 410 1,089 1,169 Gross profit 82 62 229 148 ConsolidatedRevenue 4,272 3,988 12,655 11,431 Cost of revenue 2,921 2,748 8,658 8,075 Gross profit 1,351 1,240 3,997 3,356 Reconciliation of segment gross profit Operating expenses, finance income, and finance costs are not allocated to individual segments as these are managed on an overall Group basis. Thereconciliation between reportable segment gross profit to the Group’s Income before tax is as follows: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in € millions) Segment gross profit 1,351 1,240 3,997 3,356 Research and development (309) (342) (1,103) (1,110)Sales and marketing (349) (332) (1,027) (999) General and administrative (111) (112) (370) (359)Finance income 262 66 422 201 Finance costs (17) (122) (716) (247) Income before tax 827 398 1,203 842 Revenue by country Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 (in € millions) United States 1,587 1,577 4,829 4,439 Luxembourg 3 2 9 7 Other countries 2,682 2,409 7,817 6,985 Total 4,272 3,988 12,655 11,431 Premium revenue is attributed to a country based on where the membership originates. Ad-Supported revenue is attributed to a country based on where theadvertising campaign is delivered. There are no countries that individually make up 10% or more of total revenue included in “Other countries.” - 25 -
Page 29
Table of Contents 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 paymentsassociated with its license agreements for the use of licensed content: September 30, 2025 December 31, 2024 (in € millions) Not later than one year 1,594 3,021 Later than one year but not more than five years 3,005 1,399 4,599 4,420 In addition, the Group is subject to various non-cancelable purchase obligations and service agreements with minimum spend commitments, including aservice agreement with Google for the use of Google Cloud Platform and certain podcast and marketing commitments: September 30, 2025 December 31, 2024 (in € millions) Not later than one year 712 598 Later than one year but not more than five years 433 1,021 More than five years 53 68 1,198 1,687 Contingencies Various legal actions, proceedings, and claims are pending or may be instituted or asserted against the Group. These may include, but are not limited to,matters relating to intellectual property, data protection, consumer protection, employment, and contractual rights. As a general matter, the music and other contentmade available on the Group’s Service are licensed to the Group by various third parties. Many of these licenses allow rights holders or other authorized parties to auditthe Group’s royalty payments, and any such audit could result in disputes over whether the Group has paid the proper royalties. If such a dispute were to occur, theGroup could be required to pay additional royalties, and the amounts involved could be material. The Group expenses legal fees as incurred. The Group is subject toongoing non-income tax audits in several jurisdictions. Tax authorities in certain jurisdictions have challenged our positions. The Group records a provision forcontingent losses when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. An unfavorable outcome to anylegal or tax matter, if material, could have an adverse effect on the Group’s operations or its financial position, liquidity, or results of operations. On May 16, 2024, the Mechanical Licensing Collective (“MLC”), an entity designated to administer a blanket compulsory license available under U.S. law,filed a lawsuit against Spotify USA Inc. in the U.S. District Court for the Southern District of New York (Mechanical Licensing Collective v. Spotify USA Inc., No. 1:24-cv-03809), alleging that beginning with its March 2024 reporting, Spotify USA Inc. improperly reported and underpaid royalties for its Premium Service as a bundlethat includes a monthly allocation of audiobook access. On January 29, 2025, the MLC’s lawsuit was dismissed with prejudice, with the court holding that the PremiumService is a bundle. On October 1, 2025, the MLC filed an amended complaint alleging that Spotify USA Inc. improperly valued the components of the PremiumService bundle and improperly reported royalties for the Audiobook Access Tier product. The MLC is entitled to appeal the original decision after the resolution of itsnew claims. If the MLC were to appeal and ultimately be entirely successful in its case, the liability in relation to the period March 1, 2024 to September 30, 2025would be approximately €308 million, plus potentially penalties and interest, which we cannot reasonably estimate. Any liability would be partially offset by directdeals with publishers. 22. Events after the reporting period Subsequent to the end of the reporting period, the Group signed agreements including minimum guarantees and committed spend of €507 million over the next5 years. Additionally, subsequent to the end of the reporting period and through close of business on November 3, 2025, the Company repurchased 494,594 shares for€287 million (US$333 million) as part of the share repurchase program announced on August 20, 2021 discussed in Note 13. - 26 -
Page 30
Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Special Note Regarding Forward-Looking Statements This discussion and analysis reflects our historical results of operations and financial position and contains estimates and forward-looking statements. Allstatements other than statements of historical fact are forward-looking statements. The words “may,” “might,” “will,” “could,” “would,” “should,” “expect,” “plan,”“anticipate,” “intend,” “seek,” “believe,” “estimate,” “predict,” “potential,” “continue,” “contemplate,” “possible,” and similar words are intended to identify estimatesand forward-looking statements. Our estimates and forward-looking statements are mainly based on our current expectations and estimates of future events and trends, which affect or mayaffect our businesses and operations. Although we believe that these estimates and forward-looking statements are based upon reasonable assumptions, they are subjectto numerous risks and uncertainties and are made in light of information currently available to us. Many important factors may adversely affect our results as indicatedin forward-looking statements. These factors include, but are not limited to: • our ability to attract prospective users, retain existing users, and monetize our products and services;• competition for users, their time, and advertisers;• risks associated with our international operations and our ability to manage our growth and the scope and complexity of our business;• risks associated with our new products or services and our emphasis on long-term user engagement over short-term results;• our ability to predict, recommend, and play content that our users enjoy;• our ability to generate profit or positive cash flow on a sustained basis;• our ability to convince advertisers of the benefits of our advertising offerings;• our ability to forecast or optimize advertising inventory amid evolving industry trends in digital advertising;• our ability to generate revenues from podcasts, audiobooks, and other non-music content;• potential disputes or liabilities associated with content made available on our Service (as defined above);• risks relating to acquisitions, investments, and divestitures;• our dependence upon third-party licenses for most of the content we stream;• our lack of control over third-party content providers who are concentrated and can unilaterally affect our access to content;• our ability to comply with complex license agreements;• our ability to accurately estimate royalty payments under our license agreements and relevant statutes;• the limitations on our operating flexibility due to financial commitments required under certain of our license agreements;• our ability to identify the compositions embodied in sound recordings and ownership thereof in order to obtain licenses or comply with existinglicense agreements;• assertions by third parties of infringement or other violations by us of their intellectual property rights;• our ability to protect our intellectual property;• the dependence of streaming on operating systems, online platforms, hardware, networks, regulations, and standards that we do not control;• our ability to maintain the integrity of our technology infrastructure and systems or the security of confidential information;• undetected errors, misconfigurations, bugs, or vulnerabilities in our products and services;• interruptions, delays, or discontinuations in service arising from our systems or systems of third parties;• changes in laws or regulations affecting us;• risks relating to privacy and data security, content moderation, and use of artificial intelligence;• our ability to maintain, protect, and enhance our brand;• risks associated with increased scrutiny of environmental, social, and governance matters;• payment acceptance-related risks;• our dependence on key personnel and ability to attract, retain, and motivate highly skilled employees;• our ability to access additional capital to support strategic objectives;• risks relating to currency exchange rate fluctuations and foreign exchange controls;• the impact of economic, social, or political conditions, including inflation, changes in interest rates, changes in trade policies, geopolitical conflicts inEurope and the Middle East, and related market uncertainty;• our ability to accurately estimate user metrics and other estimates;• our ability to manage and remediate attempts to manipulate streams and attempts to gain or provide unauthorized access to certain features of ourService; - 27 -
Page 31
Table of Contents • risks related to our indebtedness, including risks related to our Exchangeable Notes;• fluctuation of our operating results and fair market value of ordinary shares;• tax-related risks;• the concentration of voting power among our founders, which limits shareholders’ ability to influence our governance and business; and• risks related to our status as a foreign private issuer and a Luxembourg company. We operate in an evolving environment. New risk factors and uncertainties emerge from time to time, and it is not possible for our management to predict allrisk factors and uncertainties, nor are we able to assess the impact of all of these risk factors on our business or the extent to which any risk factor, or combination ofrisk factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of our forward-looking statements by these cautionary statements. For additional information, refer to the risk factors discussed under Part I,Item 3.D. “Risk Factors” in our Annual Report on Form 20-F for the year ended December 31, 2024 (“Annual Report on Form 20-F”) and in our other filings with theU.S. Securities and Exchange Commission (“SEC”). You should read this discussion and analysis completely and with the understanding that our actual future results may be materially different from ourexpectations. Investors and others should note that we announce material financial information to our investors using our Investors website (investors.spotify.com), SECfilings, press releases, public conference calls, and webcasts. We use these channels, as well as social media, to communicate with our users and the public about ourcompany, our Service, and other issues. It is possible that the information we post on these channels could be deemed to be material information. Therefore, weencourage investors, the media, and others interested in our Company to review the information we post on the channels listed on our Investors website. Overview We are the world’s most popular audio streaming subscription service. With a presence in 184 countries and territories, our platform includes 713 millionmonthly active users (“MAUs”), including 281 million Premium Subscribers (as defined below) as of September 30, 2025. We currently monetize our Service primarily through both subscriptions and advertising. Our Premium Subscribers have grown 12% year-over-year, as ofSeptember 30, 2025, to 281 million. Our 713 million MAUs have grown 11% year-over-year, as of September 30, 2025. Our results reflect the effects of our trial programs, both discounted and free trials, in addition to seasonal trends in user behavior and, with respect to our Ad-Supported segment, advertising behavior. Historically, Premium Subscriber growth benefits when we run such trial programs. For our Ad-Supported segment, typically we experience higher advertising revenue in the fourth quarter of each calendar year due to greater advertisingdemand during the holiday season. However, in the first quarter of each calendar year, we typically experience a seasonal decline in advertising revenue due to reducedadvertiser demand. On January 2, 2025, in the U.S., U.K., Canada and Australia, we launched the Spotify Partner Program, a new monetization program that offers podcastcreators audience-driven payouts for eligible video streaming of their content on our platform. Users benefit from a bigger catalog of video podcasts, and PremiumSubscribers in select markets are able to watch video podcasts without interruptions from dynamically inserted advertisements. On April 29, 2025, we launched theSpotify Partner Program in nine additional markets. On April 16, 2025, we announced the launch of audiobooks on our Premium Service in four additional markets: Germany, Austria, Switzerland, andLiechtenstein. Currently, audiobooks are available for eligible Premium Subscribers in 14 markets. On September 10, 2025, we introduced Lossless audio to our Premium Service in more than 50 markets, allowing subscribers to stream tracks in up to 24-bit/44.1 kHz FLAC, unlocking greater detail across nearly every song available on Spotify. On September 15, 2025, we introduced enhancements to our mobile Ad-Supported Service experience globally, adding new features that improve playback control, music discovery, and sharing. - 28 -
Page 32
Table of Contents Current macroeconomic environment The global macroeconomic environment continues to be uncertain, reflecting the impacts of inflation, changes in interest rates, changes in trade and taxpolicies, continued geopolitical conflicts in Europe and the Middle East, and related market uncertainty. We will continue to actively monitor and respond accordinglyto the macroeconomic environment. For additional information, refer to Part I, Item 3.D. “Risk Factors” in our Annual Report on Form 20-F. Key Performance Indicators We use certain key performance indicators to monitor and manage our business. We use these indicators to evaluate our business, measure our performance,identify trends affecting our business, formulate business plans, and make strategic decisions. We believe these indicators provide useful information to investors inunderstanding and evaluating our operating results in the same manner we do. MAUs We track MAUs as an indicator of the size of the audience engaged with our Service. We define MAUs as the total count of Ad-Supported Users and PremiumSubscribers that have consumed content for greater than zero milliseconds in the last thirty days from the period-end indicated. Reported MAUs may overstate thenumber of unique individuals who actively use our Service within a thirty-day period, as one individual may register for, and use, multiple accounts. Additionally,although we strive to detect and minimize non-bona fide accounts that may typically be created in an attempt to artificially stream content, they may contribute, fromtime to time, to an overstatement in our reported MAUs. Our MAUs in the tables below are inclusive of Ad-Supported Users who may have employed methods to limitor otherwise avoid being served advertisements. For additional information, refer to the risk factors discussed under Part I, Item 3.D. “Risk Factors” in our AnnualReport on Form 20-F, and in our other filings with the SEC. The table below sets forth our MAUs as of September 30, 2025 and 2024. As of September 30 2025 2024 Change (in millions, except percentages) MAUs 713 640 73 11 % MAUs were 713 million as of September 30, 2025 and 640 million as of September 30, 2024, which represented an increase of 11%. MAUs benefited fromour continued investment in driving the growth of our Service through successful consumer marketing campaigns, enhanced content offerings, and productenhancements, resulting in continued user engagement and customer satisfaction. Premium Subscribers We define Premium Subscribers as users that have completed registration with Spotify and have activated a payment method for Premium Service and othersubscription offerings (collectively, “Subscription Offerings”). Our Premium Subscribers include all registered accounts in our Family Plan and Duo Plan. Our FamilyPlan consists of one primary subscriber and up to five additional sub-accounts, allowing up to six Premium Subscribers per Family Plan Subscription. Our Duo Planconsists of one primary subscriber and up to one additional sub-account, allowing up to two Premium Subscribers per Duo Plan Subscription. Premium Subscribersinclude subscribers in a grace period of up to 30 days after failing to pay their subscription fee. The table below sets forth our Premium Subscribers as of September 30, 2025 and 2024. As of September 30 2025 2024 Change (in millions, except percentages) Premium Subscribers 281 252 29 12 % Premium Subscribers were 281 million as of September 30, 2025 and 252 million as of September 30, 2024, which represented an increase of 12%. OurFamily Plan and Duo Plan were meaningful contributors of total gross additions in Premium Subscribers, while our free trial offers and global campaigns alsoaccounted for a significant portion of gross additions in Premium Subscribers. - 29 -
Page 33
Table of Contents Ad-Supported MAUs We define Ad-Supported MAUs as the total count of Ad-Supported Users that have consumed content for greater than zero milliseconds in the last thirty daysfrom the period-end indicated. The table below sets forth our Ad-Supported MAUs as of September 30, 2025 and 2024. As of September 30 2025 2024 Change (in millions, except percentages) Ad-Supported MAUs 446 402 44 11 % Ad-Supported MAUs were 446 million as of September 30, 2025 and 402 million as of September 30, 2024, which represented an increase of 11%. Ad-Supported MAUs benefited from our continued investment in driving the growth of our Ad-Supported Service through successful consumer marketing campaigns,enhanced content offerings, and product enhancements, resulting in continued Ad-Supported User engagement and customer satisfaction. Premium ARPU Premium average revenue per user (“ARPU”) is a monthly measure defined as Premium subscription revenue recognized in the quarter indicated divided bythe average daily Premium Subscribers in such quarter, which is then divided by three months. The table below sets forth our average Premium ARPU for the three and nine months ended September 30, 2025 and 2024. Three months ended September30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change Premium ARPU € 4.53 € 4.71 € (0.18) (4)% € 4.61 € 4.63 € (0.02) — % For the three months ended September 30, 2025 and 2024, Premium ARPU was €4.53 and €4.71, respectively, which represented a decrease of 4%. Thisdecrease of €0.18 is primarily attributable to unfavorable movements in foreign exchange rates, decreasing Premium ARPU by €0.18, and changes in product andmarket mix, decreasing Premium ARPU by €0.14. These decreases were partially offset by an increase in Premium ARPU of €0.14 as a result of price increases. For the nine months ended September 30, 2025 and 2024, Premium ARPU was €4.61 and €4.63, respectively, which represented a decrease of less than 1%.This decrease of €0.02 is attributable to changes in product and market mix, decreasing Premium ARPU by €0.13, and unfavorable movements in foreign exchangerates, decreasing Premium ARPU by €0.12. These decreases were largely offset by an increase in Premium ARPU of €0.23 as a result of price increases. How We Generate Revenue We operate and manage our business in two reportable segments - Premium and Ad-Supported. We identify our reportable segments based on theorganizational units used by the chief operating decision maker to monitor performance and make operating decisions. See Note 20 to our interim condensedconsolidated financial statements for additional information regarding our reportable segments. Premium We generate revenue for our Premium segment through the sale of subscriptions to the Subscription Offerings. The Subscription Offerings are primarily solddirectly to end users. The Premium Service is also sold through partners who are generally telecommunications companies that bundle the subscription with their ownservices or collect payment for the stand-alone subscriptions from their end customers. Premium partner subscription revenue is based on a per-subscriber rate in anegotiated partner agreement. We also bundle the Premium Service with other services. - 30 -
Page 34
Table of Contents Ad-Supported We generate revenue for our Ad-Supported segment primarily from the sale of display, audio, and video advertising delivered through advertising impressions.We generally enter into arrangements with advertising agencies that purchase advertising on behalf of their clients and we also enter into arrangements directly withsome large advertisers. These advertising arrangements are typically sold on a cost-per-thousand impressions (“CPM”) basis and are evidenced by an insertion orderthat specifies the terms of the arrangement such as the type of advertising product, pricing, insertion dates, and number of impressions in a stated period. Additionally,we generate revenue through arrangements with both internal and external advertising automated exchanges, an internal self-serve platform, and advertisingmarketplace programs to distribute advertising inventory for purchase on an auction or fixed CPM basis. In addition, certain offerings within our two-sided marketplace result in advertising revenues. Components of our Operating Results Cost of revenue. Cost of revenue consists predominantly of royalty and distribution costs related to content streaming. We incur royalty costs, which we pay tocertain record labels, music publishers, audiobook publishers, and other rights holders, for the right to stream content to our users. Music royalties are typicallycalculated monthly based on the combination of a number of different variables. Generally, Subscription Offering music royalties are based on the greater of apercentage of relevant revenue and a per user amount. Music royalties for the Ad-Supported Service are typically a percentage of relevant revenue, although certainagreements are based on the greater of a percentage of relevant revenue and an amount for each time a track is streamed. We have negotiated lower per user amounts forour lower priced subscription plans such as our Family Plan, Duo Plan, and Student Plan. In our agreements with certain record labels, the percentage of revenue usedin the calculation of royalties is generally dependent upon certain targets being met. The targets can include such measures as the number of applicable PremiumSubscribers, the ratio of Ad-Supported Users to applicable Premium Subscribers, and/or the rates of applicable Premium Subscriber churn. In addition, royalty ratesvary by country. Some of our royalty agreements require that royalty costs be paid in advance or are subject to minimum guaranteed amounts. For the majority ofroyalty agreements, incremental costs incurred due to unrecouped advances and minimum guarantees have not been significant to date. We also have certain so-calledmost favored nation royalty agreements, which require us to record additional costs if certain material contract terms are not as favorable as the terms we have agreed towith similar licensors. Cost of revenue also reflects discounts provided by certain rights holders in return for promotional activities in connection with marketplaceprograms. Additionally, it includes the costs of discounted trials. Royalties payable in relation to audiobook licenses are generally consumption-based. Cost of revenue also includes the cost of podcast content assets (both produced and licensed). Amortization of podcast content assets is recorded over theshorter of the estimated useful economic life or the license period (if relevant) and begins at the release of each episode. Certain fixed fees to access content arerecorded on a straight-line basis over the applicable license period. We make payments to podcast publishers, whose content we monetize through advertising sales inthe Spotify Audience Network (“SPAN”), which are also included in cost of revenue. Additionally, cost of revenue includes payments to certain podcast publishers whodeliver video content. Amounts are recognized based on a number of factors including qualifying consumption time attributable to eligible video episodes and financialparticipations in excess of minimum guarantees. Cost of revenue also includes credit card and payment processing fees for subscription revenue, advertising serving, advertising measurement, customerservice, certain employee compensation and benefits, cloud computing, streaming, facility, and equipment costs. Research and Development. We invest heavily in research and development in order to drive user engagement and customer satisfaction on our platform,which we believe helps drive organic growth in MAUs, which, in turn, drives additional growth in, and better retention of, Premium Subscribers, as well as increasedadvertising opportunities to our users. We aim to design products and features that create and enhance user experiences, and new technologies are at the core of many ofthese opportunities. Expenses primarily comprise costs incurred for the development of products related to our platform and Service, as well as new and existingadvertising products and improvements to our mobile application and desktop application and streaming services. The costs incurred include related facility costs,consulting costs, and employee compensation and benefits costs. We expect engineers to represent a significant portion of our employees over the foreseeable future. Many of our new products and improvements to our platform require large investments and involve substantial time and risks to develop and launch. Some ofthese products may not be well received or may take a long time for users to adopt. As a result, the benefits of our research and development investments are difficult toforecast. - 31 -
Page 35
Table of Contents Sales and Marketing. Sales and marketing expenses primarily comprise employee compensation and benefits, public relations, branding, consulting expenses,customer acquisition costs, advertising, marketing events and trade shows, the cost of working with content creators and rights holders to promote the availability ofnew releases on our platform, and the costs of providing free trials. Expenses included in the cost of providing free trials are derived primarily from per user royalty feesdetermined in accordance with the rights holder agreements. General and Administrative. General and administrative expenses primarily comprise employee compensation and benefits for functions such as finance,accounting, analytics, legal, human resources, consulting fees, and other costs, including facility and equipment costs, directors’ and officers’ liability insurance, anddirector fees. Results of Operations Revenue Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Premium 3,826 3,516 310 9 % 11,337 10,114 1,223 12 %Ad-Supported 446 472 (26) (6)% 1,318 1,317 1 — %Total 4,272 3,988 284 7 % 12,655 11,431 1,224 11 % Premium revenue For the three months ended September 30, 2025 and 2024, Premium revenue comprised 90% and 88% of our total revenue, respectively. For the three monthsended September 30, 2025 as compared to the three months ended September 30, 2024, Premium revenue increased €310 million, or 9%. The increase was dueprimarily to an increase in the number of Premium Subscribers, partially offset by a decrease in Premium ARPU, as described above. For the nine months ended September 30, 2025 and 2024, Premium revenue comprised 90% and 88% of our total revenue, respectively. For the nine monthsended September 30, 2025 as compared to the nine months ended September 30, 2024, Premium revenue increased €1,223 million, or 12%. The increase was dueprimarily to an increase in the number of Premium Subscribers, partially offset by a decrease in Premium ARPU, as described above. Ad-Supported revenue For the three months ended September 30, 2025 and 2024, Ad-Supported revenue comprised 10% and 12% of our total revenue, respectively. For the threemonths ended September 30, 2025 as compared to the three months ended September 30, 2024, Ad-Supported revenue decreased €26 million, or 6%. This decrease wasdue primarily to a decrease of €34 million in our direct channel, mainly due to a decrease in music impressions sold, offset by an increase in our programmatic channelsand our self-serve platform (i.e. automated sales channels) by €23 million driven by an increase in music impressions sold primarily on our auction-based offerings. For the nine months ended September 30, 2025 and 2024, Ad-Supported revenue comprised 10% and 12% of our total revenue, respectively. For the ninemonths ended September 30, 2025 as compared to the nine months ended September 30, 2024, Ad-Supported revenue increased €1 million, or less than 1%. Thisincrease was due primarily to an increase in music impressions sold primarily on our auction-based offerings, which increased revenue in our programmatic channelsand our self-serve platform (i.e. automated sales channels) by €67 million. This was offset by a decrease in our direct channel by €60 million, mainly due to a decreasein music impressions sold. Foreign exchange impact on total revenue The changes in revenue described above include the impact of foreign exchange rate movements during the respective periods. The general movement of theEuro relative to certain foreign currencies, primarily the U.S. dollar for the three months ended September 30, 2025 and the U.S. dollar, Mexican peso, and Brazilianreal for the nine months ended September 30, 2025, as compared to the same periods in 2024, had a net unfavorable impact on our revenue. We estimate that totalrevenue for the three and nine months ended September 30, 2025 would have been approximately €178 million and €337 million higher, respectively, if foreignexchange rates had remained consistent with foreign exchange rates for the comparable periods in 2024. - 32 -
Page 36
Table of Contents Cost of revenue Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Premium 2,557 2,338 219 9 % 7,569 6,906 663 10 %Ad-Supported 364 410 (46) (11)% 1,089 1,169 (80) (7)%Total 2,921 2,748 173 6 % 8,658 8,075 583 7 % Premium cost of revenue For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, Premium cost of revenue increased €219million, or 9%, and Premium cost of revenue as a percentage of Premium revenue increased from 66% to 67%. The increase in Premium cost of revenue was drivenprimarily by increases in Premium revenue driving increases in music royalties, as well as increases in audiobook licensing costs and costs associated with the launch ofthe Spotify Partner Program, partially offset by benefits from certain marketplace programs. These collectively resulted in higher royalty costs of €191 million. Royaltycosts for the three months ended September 30, 2025 included €11 million in benefits from changes in prior period estimates for rights holder liabilities. Additionally,there was an €11 million increase in payment processing fees during the three months ended September 30, 2025. For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, Premium cost of revenue increased €663million, or 10%, and Premium cost of revenue as a percentage of Premium revenue decreased from 68% to 67%. The increase in Premium cost of revenue was drivenprimarily by increases in Premium revenue driving increases in music royalties, as well as increases in audiobook licensing costs and costs associated with the launch ofthe Spotify Partner Program, partially offset by benefits from certain marketplace programs. These collectively resulted in higher royalty costs of €588 million. Royaltycosts for the nine months ended September 30, 2025 included €11 million in benefits from changes in prior period estimates for rights holder liabilities. Additionally,there was a €28 million increase in payment processing fees and a €19 million increase in streaming delivery costs during the nine months ended September 30, 2025. Ad-Supported cost of revenue For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, Ad-Supported cost of revenue decreased €46million, or 11%, and Ad-Supported cost of revenue as a percentage of Ad-Supported revenue decreased from 87% to 82%. The decrease in Ad-Supported cost ofrevenue was driven primarily by a reduction in podcast costs of €24 million due primarily to our optimization of podcast inventory as well as costs attributable to thenew video podcast experience available to subscribers to our Premium Service now recorded to the Premium segment. Additionally, cost of revenue was impacted by adecrease in music royalty costs, driven by a decrease in advertising revenue and benefits from changes in prior period estimates for rights holder liabilities, resulting inlower royalty costs of €17 million during the three months ended September 30, 2025. For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, Ad-Supported cost of revenue decreased €80million, or 7%, and Ad-Supported cost of revenue as a percentage of Ad-Supported revenue decreased from 89% to 83%. The decrease in Ad-Supported cost of revenuewas driven primarily by a reduction in podcast costs of €66 million due primarily to our optimization of podcast inventory as well as costs attributable to the new videopodcast experience available to subscribers to our Premium Service now recorded to the Premium segment. Additionally, music royalty costs decreased by €14 millionduring the nine months ended September 30, 2025, due primarily to benefits from certain marketplace programs and benefits from changes in prior period estimates forrights holder liabilities. Foreign exchange impact on total cost of revenue The changes in cost of revenue described above include the impact of foreign exchange rate movements during the respective periods. The generalmovement of the Euro relative to certain foreign currencies, primarily the U.S. dollar for the three months ended September 30, 2025 and the U.S. dollar, Mexican peso,and Brazilian real for the nine months ended September 30, 2025, as compared to the same periods in 2024, had a net favorable impact on our cost of revenue. Weestimate that total cost of revenue for the three and nine months ended September 30, 2025 would have been approximately €128 million and €248 million higher,respectively, if foreign exchange rates had remained consistent with foreign exchange rates for the comparable periods in 2024. - 33 -
Page 37
Table of Contents Gross profit and gross margin Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Gross profitPremium 1,269 1,178 91 8 % 3,768 3,208 560 17 %Ad-Supported 82 62 20 32 % 229 148 81 55 %Consolidated 1,351 1,240 111 9 % 3,997 3,356 641 19 %Gross margin Premium 33 % 34 % 33 % 32 %Ad-Supported 18 % 13 % 17 % 11 %Consolidated 32 % 31 % 32 % 29 % Premium gross profit and gross margin For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, Premium gross profit increased by €91million, and Premium gross margin decreased from 34% to 33%. Premium gross margin decreased due primarily to increases in costs associated with the launch of theSpotify Partner Program, inclusive of certain costs previously attributable to the Ad-Supported segment. The decrease in gross margin was partially offset by revenuegrowth outpacing music royalty costs net of certain marketplace programs and audiobook licensing costs during the three months ended September 30, 2025. Alsopartially offsetting the decrease in gross margin were net benefits from changes in prior period estimates for rights holder liabilities for the three months endedSeptember 30, 2025 with no comparable benefit for the three months ended September 30, 2024. For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, Premium gross profit increased by €560 million,and Premium gross margin increased from 32% to 33%. Premium gross margin increased due primarily to revenue growth outpacing music royalty costs net of certainmarketplace programs and audiobook licensing costs, partially offset by increases in costs associated with the launch of the Spotify Partner Program, inclusive ofcertain costs previously attributable to the Ad-Supported segment, during the nine months ended September 30, 2025. Also contributing to the increase in gross marginwere net benefits from changes in prior period estimates for rights holder liabilities for the nine months ended September 30, 2025 with no comparable benefit for thenine months ended September 30, 2024. Ad-Supported gross profit and gross margin For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, Ad-Supported gross profit increased by €20million, and gross margin increased from 13% to 18%. The increase in Ad-Supported gross margin was due primarily to a reduction in podcast costs. Additionally, theincrease in gross margin was due to growth in benefits from certain marketplace programs. For the nine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, Ad-Supported gross profit increased by €81million, and gross margin increased from 11% to 17%. The increase in Ad-Supported gross margin was due primarily to a reduction in podcast costs. Additionally, theincrease in gross margin was due to growth in benefits from certain marketplace programs. Consolidated Operating Expenses Research and development Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Research and development 309 342 (33) (10)% 1,103 1,110 (7) (1)% As a percentage of revenue 7 % 9 % 9 % 10 % For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, research and development costs decreased by€33 million, or 10%. The decrease was due primarily to a decrease of €46 million in social costs due primarily to changes in share price movements. - 34 -
Page 38
Table of Contents For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, research and development costs decreased €7million, or 1%. The decrease was due primarily to a decrease in share-based compensation of €14 million, due to a change in the timing of annual grants in 2025,moving from March 1 to May 1. There was also a decrease of €8 million in social costs due primarily to changes in share price movements. These decreases werepartially offset by an increase of €18 million in information technology costs due primarily to an increase in our usage of cloud computing services. Sales and marketing Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Sales and marketing 349 332 17 5 % 1,027 999 28 3 % As a percentage of revenue 8 % 8 % 8 % 9 % For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, sales and marketing expense increased by €17million, or 5%. The increase was due primarily to an increase in advertising costs of €22 million for marketing campaigns. This increase was partially offset by adecrease of €15 million in social costs due primarily to changes in share price movements. For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, sales and marketing expense increased by €28million, or 3%. The increase was due primarily to an increase in advertising costs of €15 million for marketing campaigns. General and administrative Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) General and administrative 111 112 (1) (1)% 370 359 11 3 %As a percentage of revenue 3 % 3 % 3 % 3 % For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, general and administrative expense decreasedby €1 million, or 1%. For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, general and administrative expense increased by€11 million, or 3%. Foreign exchange impact on total operating expenses The increases in operating expenses described above include the impact of foreign exchange rate movements during the respective periods. A significantportion of our operating expenses are denominated in the U.S. dollar. The general movement of the Euro relative to certain foreign currencies, primarily the U.S. dollar,for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, had a favorable net impact on ouroperating expenses. We estimate that total operating expenses for the three and nine months ended September 30, 2025 would have been approximately €27 million and€76 million higher if foreign exchange rates had remained consistent with foreign exchange rates for the comparable periods in 2024. - 35 -
Page 39
Table of Contents Finance income Finance income consists of fair value adjustment gains on certain financial instruments, interest income earned on our cash and cash equivalents and shortterm investments, interest income on our finance lease receivables, dividends received on our long term investments, and foreign currency gains. Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Finance income 262 66 196 297 % 422 201 221 110 %As a percentage of revenue 6 % 2 % 3 % 2 % For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, finance income increased by €196 million. Theincrease was due primarily to €197 million of fair value movements on the Exchangeable Notes recognized within finance income during the three months endedSeptember 30, 2025, with no such activity recognized within finance income during the three months ended September 30, 2024. For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, finance income increased by €221 million. Theincrease was due primarily to €197 million of fair value movements on the Exchangeable Notes recognized within finance income during the nine months endedSeptember 30, 2025, with no such activity recognized within finance income during the nine months ended September 30, 2024. Finance income for the nine monthsended September 30, 2025, as compared to the nine months ended September 30, 2024, also included an increase in interest income earned on cash and cash equivalentsand short term investments of €25 million. Finance costs Finance costs consist of fair value adjustment losses on certain financial instruments, interest expense, and foreign currency losses. Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Finance costs (17) (122) 105 (86)% (716) (247) (469) 190 %As a percentage of revenue — % (3)% (6)% (2)% For the three months ended September 30, 2025 as compared to the three months ended September 30, 2024, finance costs decreased by €105 million. Thedecrease was due primarily to €67 million of fair value movements on the Exchangeable Notes recognized within finance costs during the three months endedSeptember 30, 2024, with no such activity recognized within finance costs during the three months ended September 30, 2025. Finance costs for the three months endedSeptember 30, 2025, as compared to the three months ended September 30, 2024, also included a decrease in foreign exchange losses on the remeasurement ofmonetary assets and liabilities in a transaction currency other than the functional currency of €28 million. For the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, finance costs increased by €469 million. Theincrease was due primarily to an increase of €456 million in fair value movements on the Exchangeable Notes recognized within finance costs. Finance costs for thenine months ended September 30, 2025, as compared to the nine months ended September 30, 2024, also included an increase in foreign exchange losses on theremeasurement of monetary assets and liabilities in a transaction currency other than the functional currency of €45 million. Additionally, finance costs for the ninemonths ended September 30, 2024 included an increase in fair value movements on warrants of €33 million, with no such activity recognized within finance costsduring the nine months ended September 30, 2025. - 36 -
Page 40
Table of Contents Income tax (benefit)/expense Three months ended September 30, Nine months ended September 30, 2025 2024 Change 2025 2024 Change (in € millions, except percentages) Income tax (benefit)/expense (72) 98 (170) (173)% 165 71 94 132 % As a percentage of revenue (2)% 2 % 1 % 1 % The effective tax rate for the three months ended September 30, 2025 is lower than the Luxembourg statutory rate of 23.87%, primarily driven by a €202million benefit relating to the impact of acceleration of the deduction of the previously capitalized and unamortized domestic Section 174 research and development(“R&D”) costs. Additionally there was a benefit of €50 million relating to the change in non-deductible losses associated with the Exchangeable Notes. The effective tax rate for the three months ended September 30, 2024 of 24.5% was not materially different from the Luxembourg statutory rate of 24.94%. The effective tax rate for the nine months ended September 30, 2025 is lower than the Luxembourg statutory rate of 23.87%, primarily driven by a benefit of€198 million relating to the impact of acceleration of the deduction of the previously capitalized and unamortized domestic Section 174 R&D costs. This was offset by€103 million of expense relating to the change in non-deductible losses associated with the Exchangeable Notes. The effective tax rate for the nine months ended September 30, 2024 was lower than the Luxembourg statutory rate of 24.94%, primarily due to a €100 milliontax benefit for change in deferred tax recognition in Sweden offset by €31 million of expense related to the impact of the Spotify USA Inc. position on the capitalizationof Section 174 R&D costs during the period. Additionally there was €29 million of expense relating to the tax treatment of share-based compensation and fair valueadjustments. Non-IFRS financial measure We have reported our interim financial results in accordance with IAS 34 as issued by the IASB. In addition, we have discussed our results using the non-IFRS measure of Free Cash Flow as discussed below. We define “Free Cash Flow” as net cash flows from operating activities less capital expenditures and change in restricted cash. We believe Free Cash Flowis a useful supplemental financial measure for us and investors in assessing our ability to pursue business opportunities and investments and to service our debt. FreeCash Flow is not a measure of our liquidity under IFRS and should not be considered as an alternative to net cash flows from operating activities. Free Cash Flow is a non-IFRS measure and is not a substitute for IFRS measures in assessing our overall financial performance. Because Free Cash Flow isnot a measurement determined in accordance with IFRS, and is susceptible to varying calculations, it may not be comparable to other similarly titled measurespresented by other companies. You should not consider Free Cash Flow in isolation, or as a substitute for an analysis of our results as reported on our interim condensedconsolidated financial statements appearing elsewhere in this document. Set forth below is a reconciliation of Free Cash Flow to net cash flows from operating activities for the periods presented. Nine months ended September 30, 2025 2024 (in € millions) Net cash flows from operating activities 2,077 1,418 Capital expenditures (39) (11)Change in restricted cash 2 1 Free Cash Flow 2,040 1,408 - 37 -
Page 41
Table of Contents Liquidity and Capital Resources Our principal sources of liquidity are our cash and cash equivalents, short term investments, and cash generated from operating activities. In addition, wegenerate cash inflows from the exercise of stock options, which can be significant depending on activity in the period. Cash and cash equivalents and short terminvestments consist mostly of cash on deposit with banks, time deposits, investments in money market funds, and investments in government securities, agencysecurities, corporate notes, fixed income funds, and collateralized reverse purchase agreements. Cash and cash equivalents and short term investments increased by€1,614 million from €7,448 million as of December 31, 2024 to €9,062 million as of September 30, 2025. We believe our existing cash and cash equivalents, short term investments, and the cash flow we generate from our operations will be sufficient for at leastthe next 12 months to meet our working capital and capital expenditure needs and other liquidity requirements, such as if we decide to settle the outstandingExchangeable Notes in cash. However, our future capital requirements may be materially different than those currently planned in our budgeting and forecastingactivities and depend on many factors, including our rate of revenue growth, the timing of new product introductions, market acceptance of our products, the acquisitionof other companies, competitive factors, and global economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fundour future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in additionaldilution to our shareholders, while the incurrence of debt financing would result in debt service obligations. Such debt instruments also could introduce covenants thatmight restrict our operations. We cannot assure you that we could obtain additional financing on favorable terms, or at all. For additional information, refer to Part I,Item 3.D. “Risk Factors” in our Annual Report on Form 20-F. We continue to evaluate our real estate footprint to optimize our global office space while making necessary investments in offices and informationtechnology infrastructure to grow our business. We fund these investments using current cash and cash equivalents and the cash flow we generate from operations.Given the impact of our Work From Anywhere program and in conjunction with a strategic review of our real estate footprint and space utilization trends, our focus hasshifted more towards optimizing our current portfolio and reviewing our real estate needs around the world as opposed to significant expansion of our presence incurrent markets. This has resulted in a reduction of our real estate footprint as we have decided to sublease certain leased office space. See Note 7 to our interimcondensed consolidated financial statements for further details. Share repurchase program On August 20, 2021, the Company announced that the board of directors had approved a program to repurchase up to US$1.0 billion of the Company’sordinary shares. On July 29, 2025, the Company announced that the board of directors had approved an increase in the Company’s share repurchase program by anadditional US$1.0 billion. Repurchases of up to 10,000,000 of the Company’s ordinary shares were authorized at the Company’s general meeting of shareholders onApril 21, 2021. The authorization to repurchase will expire on April 21, 2026 unless renewed by decision of a general meeting of shareholders of the Company. As ofSeptember 30, 2025, the Company repurchased 581,404 shares for €157 million under this program. The Company repurchased 112,130 shares for €66 million (US$77million) during the three and nine months ended September 30, 2025. As of September 30, 2025, the maximum value of shares that may yet be purchased under theshare repurchase program is approximately US$1,819 million. The timing and actual number of shares repurchased depends on a variety of factors, including price, general business and market conditions, and alternativeinvestment opportunities. The repurchase program is executed consistent with the Company’s approach to capital allocation of prioritizing profitable growth whilemaintaining a balance sheet that can support our long term strategy. The repurchase program does not obligate the Company to acquire any particular amount ofordinary shares, and the repurchase program may be suspended or discontinued at any time at the Company’s discretion. The Company uses current cash and cashequivalents and the cash flow it generates from operations to fund the share repurchase program. - 38 -
Page 42
Table of Contents Exchangeable Notes On March 2, 2021, Spotify USA Inc. issued US$1,500 million in aggregate principal amount of the Exchangeable Notes. Net proceeds from the issuance ofthe Exchangeable Notes were €1,223 million after deducting the transaction costs. The noteholders may exchange their Exchangeable Notes at their option intoconsideration that consists, at the Issuer’s election, of cash, ordinary shares of the Company, or a combination of cash and ordinary shares, but only under certaincircumstances as set forth in the Indenture. The circumstances required to allow the noteholders to exchange their Exchangeable Notes were met as of June 30, 2025and September 30, 2025. The Exchangeable Notes are exchangeable through close of business on March 12, 2026. Since March 20, 2024, the Exchangeable Notes areredeemable, in whole or in part, at the Issuer's option at any time, and from time to time, and on or before the 40th scheduled trading day immediately before thematurity date, at a cash redemption price equal to the principal amount of the Exchangeable Notes to be redeemed, plus accrued and unpaid special and additionalinterest, if any, but only under certain circumstances as set forth in the Indenture. The circumstances required to allow the Issuer to redeem the Exchangeable Noteswere met as of September 30, 2025. See Note 15 to our interim condensed consolidated financial statements for further information regarding our Exchangeable Notes. Cash flow Nine months ended September 30, 2025 2024 (in € millions) Net cash flows from operating activities 2,077 1,418 Net cash flows used in investing activities (1,156) (288) Net cash flows from financing activities 37 485 Free Cash Flow 2,040 1,408 (1) For a discussion of the limitations associated with using Free Cash Flow rather than IFRS measures, and a reconciliation of Free Cash Flow to net cash flows from operating activities, see “Non-IFRSFinancial Measure” above. Operating activities Net cash flows from operating activities increased by €659 million to €2,077 million for the nine months ended September 30, 2025 as compared to the ninemonths ended September 30, 2024. The increase was due primarily to an increase in operating income adjusted for non-cash items including depreciation, amortization,impairment charge on real estate assets, and share-based compensation expense, resulting in an increase in cash flows from operating activities of €572 million.Additionally, there were favorable changes in working capital movements of €100 million, principally driven by favorable changes in trade and other liabilities,partially offset by unfavorable changes in trade receivables and other assets. There was also an increase in interest received on cash and cash equivalents and short terminvestments of €29 million offset by an increase in income tax paid of €39 million. Investing activities Net cash flows used in investing activities increased by €868 million for the nine months ended September 30, 2025 as compared to the nine months endedSeptember 30, 2024. The increase was due primarily to an increase in net cash outflows from purchases and sales and maturities of short term investments of €849million. Financing activities Net cash flows from financing activities decreased by €448 million for the nine months ended September 30, 2025 as compared to the nine months endedSeptember 30, 2024. The decrease was due primarily to a decrease in cash proceeds from the exercise of stock options of €299 million and by an increase in paymentsfor employee taxes withheld from restricted stock unit releases of €89 million. There was also an increase in share repurchases of €58 million. Free Cash Flow Free Cash Flow increased by €632 million to €2,040 million for the nine months ended September 30, 2025 as compared to the nine months endedSeptember 30, 2024, due primarily to an increase in net cash flows from operating activities of €659 million, as described above. (1) - 39 -
Page 43
Table of Contents Restrictions on subsidiaries to transfer funds The payment of dividends and the making, or repayment, of loans and advances to the Company by the Company’s direct subsidiaries and by its indirectsubsidiaries to their respective parent entities are subject to various restrictions. Future indebtedness of these subsidiaries may prohibit the payment of dividends or themaking, or repayment, of loans or advances to the Company. In addition, the ability of any of the Company’s direct or indirect subsidiaries to make certain distributionsmay be limited by the laws of the relevant jurisdiction in which the subsidiaries are organized or located. Since the Company is expected to rely primarily on dividendsfrom its direct and indirect subsidiaries to fund its financial and other obligations, restrictions on its ability to receive such funds may adversely impact the Company’sability to fund its financial and other obligations. Indebtedness As of September 30, 2025, our outstanding indebtedness, other than lease liabilities, consisted primarily of the Exchangeable Notes that mature on March15, 2026 and bear no interest. See Note 15 to our interim condensed consolidated financial statements for further information regarding our Exchangeable Notes. Wemay from time to time seek to incur additional indebtedness. Such indebtedness, if any, will depend on prevailing market conditions, our liquidity requirements,contractual restrictions, and other factors. Off-balance sheet arrangements As of September 30, 2025, we do not have transactions with unconsolidated entities, such as entities often referred to as structured finance or specialpurpose entities, whereby we have financial guarantees, subordinated retained interests, derivative instruments, or other contingent arrangements that expose us tomaterial continuing risks, contingent liabilities, or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, marketrisk, or credit risk support to us. Contractual obligations The following table sets forth our contractual obligations and commercial commitments as of September 30, 2025: Payments due by period Total Less than1 year 1-3 years 3-5 years More than5 years (in € millions) Minimum guarantees 4,599 1,594 2,954 51 — Exchangeable Notes 1,278 1,278 — — — Lease obligations 694 93 178 147 276 Purchase obligations 1,198 712 403 30 53 Total 7,769 3,677 3,535 228 329 (1) We are subject to minimum royalty payments associated with our license agreements for the use of licensed content. See Part I, Item 3.D. “Risk Factors” in our Annual Report on Form 20-F.(2) Consists of principal on our 0.00% Exchangeable Notes due March 15, 2026.(3) Included in the lease obligations are short term leases and certain lease agreements that we have entered into, but had not yet commenced as of September 30, 2025. Lease obligations primarily relateto our office space and our subleased properties. The expected lease terms are up to 11 years. See Note 7 to the interim condensed consolidated financial statements for further details regarding leases.(4) We are 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 CloudPlatform and certain podcast and marketing commitments. Subsequent to the end of the reporting period, the Group signed agreements including minimum guarantees and committed spend of €507 million over the next5 years. Item 3. Quantitative and Qualitative Disclosures About Market Risk Our activities expose us to a variety of market risks. Our primary market risk exposures relate to currency, interest rate, share price, investment, andinflation risks. To manage these risks and our exposure to the unpredictability of financial markets, we seek to minimize potential adverse effects on our financialperformance and capital. (1) (2) (3) (4) - 40 -
Page 44
Table of Contents Volatile market conditions caused by significant events with macroeconomic impacts, including, but not limited to, inflation, changes in interest rates,changes in trade and tax policies, geopolitical conflicts in Europe and the Middle East, and related market uncertainty, may result in significant changes in foreignexchange rates, interest rates, and share prices, both our own and those of third parties we use to value certain of our long term investments. Refer to Part I, Item 3.D.“Risk Factors” in our Annual Report on Form 20-F for further discussion on the impact of worldwide economic conditions on our business, operating results, andfinancial condition. Currency risk Currency risk manifests itself in transaction exposure, which relates to business transactions denominated in foreign currency required by operations(purchasing and selling) and/or financing (interest and amortization). The volatility in foreign exchange rates, in particular a weakening of foreign currencies relative tothe Euro, may negatively affect our revenue. Our general policy is to hedge transaction exposure on a case-by-case basis. Translation exposure relates to net investmentsin foreign operations. We do not conduct translation risk hedging. Transaction exposure sensitivity In most cases, our customers are billed in their respective local currency. Major payments, such as salaries, consultancy fees, and rental fees are settled inlocal currencies. Royalty payments are primarily settled in Euros and U.S. dollars. Hence, the operational need to net purchase foreign currency is due primarily to adeficit from such settlements. The table below shows the immediate impact on Income before tax of a 10% strengthening of foreign currencies relative to the Euro in the closing exchangerate of significant currencies to which we have transaction exposure, at September 30, 2025. The impact on Income before tax is due primarily to monetary assets andliabilities in a transactional currency other than the functional currency of a subsidiary within the Group. The sensitivity associated with a 10% weakening of aparticular currency would be equal and opposite. This assumes that each currency moves in isolation. Swedish krona(SEK) British pound(GBP) U.S. dollar(USD) (in € millions) Decrease in Income before tax (15) (25) (47) Translation Exposure Sensitivity The impact on our equity would be approximately €238 million if the Euro weakened by 10% against all translation exposure currencies, based on theexposure at September 30, 2025. Interest rate risk Interest rate risk is the risk that changes in interest rates will have a negative impact on earnings and cash flow. Our exposure to interest rate risk is related toour interest-bearing assets, including our cash and cash equivalents and our short term debt securities. Fluctuations in interest rates impact the yield of the investment.The sensitivity analysis considered the historical volatility of short term interest rates and we determined that it was reasonably possible that a change of 100 basispoints could be experienced in the near term. A hypothetical 100 basis point decrease or increase in interest rates would have resulted in a change in interest incomeearned on our cash and cash equivalents and short term investments of €22 million and €62 million for the three and nine months ended September 30, 2025,respectively. Share price risk Share price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in the fair value of the Company’sordinary share price. Our exposure to this risk relates primarily to the Exchangeable Notes and accrual for social costs on outstanding share-based compensationawards. A 10% decrease or increase in the Company’s ordinary share price would have resulted in a fair value of the Exchangeable Notes ranging from €1,667million to €1,820 million at September 30, 2025. A 10% decrease or increase in the Company’s ordinary share price would have resulted in a decrease or increase in the accrual for social costs onoutstanding share-based compensation awards of €37 million at September 30, 2025. Investment risk We are exposed to investment risk as it relates to changes in the market value of our long term investments, due primarily to volatility in the share price usedto measure the investment and exchange rates. The majority of our long term investments relate to TME. A 10% decrease or increase in TME’s share price would haveresulted in a fair value of the Group’s long term investment in TME ranging from €2,532 million to €3,094 million at September 30, 2025. - 41 -
Page 45
Table of Contents Inflation risk Inflationary factors, such as increases in costs, may adversely affect our results of operations. If our costs were to become subject to significant inflationarypressures, we may not be able to fully offset such higher costs through price increases for our Subscription Offerings or sale of advertisements. Our inability or failureto do so could harm our business, operating results, and financial condition. Critical accounting policies and estimates We prepare our interim condensed consolidated financial statements in accordance with IFRS as issued by the IASB. Preparing these financial statementsrequires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, equity, revenue, expenses, and related disclosures. We evaluate ourestimates and assumptions on an ongoing basis. Our estimates are based on historical experience and various other assumptions that we believe to be reasonable underthe circumstances. Our actual results may differ from these estimates. We believe that the assumptions and estimates associated with revenue recognition, share-based compensation, deferred taxes, uncertain tax positions,goodwill impairment, content, provisions, impairment of real estate assets, and Exchangeable Notes and warrants have the greatest potential impact on our interimcondensed consolidated financial statements. Therefore, we consider these to be our critical accounting policies and estimates. There have been no material changes or additions to our critical accounting policies and estimates as compared to the critical accounting policies andestimates described in our Annual Report on Form 20-F. Recent accounting pronouncements There are no new IFRS or IFRIC interpretations effective for the nine months ended September 30, 2025 that have a material impact to the interimcondensed consolidated financial statements. See Note 2 to our interim condensed consolidated financial statements included in this report. - 42 -
Page 46
Table of Contents PART II - OTHER INFORMATION Item 1. Legal Proceeding We are, from time to time, subject to various claims, lawsuits and other legal proceedings. Some of these claims, lawsuits and other legal proceedingsinvolve highly complex issues, and often these issues are subject to substantial uncertainties. Accordingly, our potential liability with respect to a large portion of suchclaims, lawsuits and other legal proceedings cannot be estimated with certainty. Management, with the assistance of legal counsel, periodically reviews the status ofeach significant matter and assesses potential financial exposure. We recognize provisions for claims or pending litigation when it determines that an unfavorableoutcome is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertain nature of litigation, the ultimate outcome or actual cost ofsettlement may materially vary from estimates. If management’s estimates prove incorrect, current reserves could be inadequate and we could incur a charge to earningswhich could have a material adverse effect on our results of operations, financial condition, and cash flows. For a discussion of legal proceedings in which we are involved, see Note 18 and Note 21 to our interim condensed consolidated financial statementsincluded in this report. Item 1A. Risk Factors There have been no material changes from the risk factors and information disclosed in Part I, Item 3.D. “Risk Factors” in our Annual Report on Form 20-F. Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Issuer Purchases of Equity Share repurchase activity during the three months ended September 30, 2025 was as follows: Period Total Number ofShares Purchased Average PricePaid per Share Total Number of SharesPurchased as Part ofPublicly Announced Plansor Programs (1) Maximum Value of Sharesthat May Yet BePurchased Under the Plansor Programs (2) July 1, 2025 - July 31, 2025 500,000 (3) € — — € 1,615,572,669 August 1, 2025 - August 31, 2025 16,040 € 557.03 16,040 € 1,606,750,790 September 1, 2025 - September 30, 2025 96,090 € 591.52 96,090 € 1,549,960,580 Total 612,130 € 586.58 (4) 112,130 € 1,549,960,580 (1) On August 20, 2021, the Company announced that the board of directors had approved a program to repurchase up to US$1.0 billion of the Company’s ordinary shares. On July 29, 2025, theCompany announced that the board of directors had approved an increase in the Company’s share repurchase program by an additional US$1.0 billion. Repurchases of up to 10,000,000 of theCompany’s ordinary shares were authorized at the Company’s general meeting of shareholders on April 21, 2021. The authorization to repurchase will expire on April 21, 2026 unless renewed bydecision of a general meeting of shareholders of the Company. As of September 30, 2025, the Company repurchased 581,404 shares for €157 million under this program.(2) The maximum value of shares that may yet be purchased under the share repurchase program announced on August 20, 2021 is translated into Euro from U.S. Dollars at the exchange rate aspublished by Reuters on September 30, 2025.(3) On July 3, 2025, the Company issued 500,000 ordinary shares to its Netherlands subsidiary at par value and subsequently repurchased those ordinary shares on the same date at the same price. Theseshares are held in treasury in order to facilitate the fulfillment of option exercises and restricted stock unit releases under the Company’s stock option and restricted stock unit plans. See Note 13 to ourinterim condensed consolidated financial statements included in this report for additional details.(4) Represents the average price paid per share for open market repurchases. Repurchases of shares from the Company’s Netherlands subsidiary at par value are not included in this calculation. Item 3. Defaults Upon Senior Securities None. Item 5. Other Information None. - 43 -
Page 47
Table of Contents SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned,thereunto duly authorized. Spotify Technology S.A. Date: November 4, 2025 By: /s/ Christian Luiga Name: Christian Luiga Title: Chief Financial Officer - 44 -