Netflix vs Spotify: Revenue, Profit and Business Model
Netflix had $45.2B of annual revenue in FY2025 and $11B of net income. Spotify had ~$19.4B of annual revenue in FY2025 and ~$2.5B of net income.
Latest financial snapshot
Financial summary
Netflix
Netflix spent much of the 2010s running negative free cash flow and borrowing to fund originals such as Stranger Things. That investment phase is over. Revenue grew from $8.8B in 2016 to $45.18B in 2025, net income from $187M to $10.98B, and operating margin reached 29.5% in 2025. The company now self-funds its content slate and buys back stock; it had about $27B left under its repurchase authorization in September 2026. In 2026 it guided to $51.0B-$51.4B in revenue and a 31.5% operating margin, and it also received a one-time $2.8B termination fee after the Warner Bros. deal ended. Netflix holds a market valuation of hundreds of billions of dollars, remaining the dominant leader in global streaming entertainment.
Spotify
Spotify's 2025 Form 20-F reports EUR17.186 billion in revenue, EUR2.198 billion in operating income and EUR2.212 billion in net income, compared with EUR15.673 billion, EUR1.365 billion and EUR1.138 billion, respectively, in 2024. Operating cash flow was EUR2.933 billion in 2025; Spotify's separately defined, non-IFRS free cash flow was EUR2.874 billion after capital expenditure and restricted-cash adjustments. The latest quarterly release, for Q3 2026, reported approximately EUR5.0 billion in revenue, EUR672 million in operating income and a 33.0% gross margin. Spotify had 306 million Premium subscribers and 788 million monthly active users at quarter end. These quarterly figures are not a full-year 2026 result. The company reports in euros; its market capitalization changes with the share price and is not a measure of annual revenue or profit.
Revenue and profit by year
Netflix
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $45.2B | $11B | 24.3% | +15.9% | Source |
| FY2024 | $39B | $8.7B | 22.3% | +15.6% | Source |
| FY2023 | $33.7B | $5.4B | 16.0% | +6.7% | Source |
| FY2022 | $31.6B | $4.5B | 14.2% | +6.5% | Source |
| FY2021 | $29.7B | $5.1B | 17.2% | +18.8% | Source |
| FY2020 | $25B | $2.8B | 11.0% | +24.0% | Source |
| FY2019 | $20.2B | $1.9B | 9.3% | +27.6% | Source |
| FY2018 | $15.8B | $1.2B | 7.7% | +35.1% | Source |
| FY2017 | $11.7B | $558.9M | 4.8% | +32.4% | Source |
| FY2016 | $8.8B | $186.7M | 2.1% | — | Source |
Spotify
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | ~$19.4B | ~$2.5B | 12.9% | +9.7% | Source |
| FY2024 | ~$17.7B | ~$1.3B | 7.3% | +18.3% | Source |
| FY2023 | ~$15B | ~-$601.2M | -4.0% | +13.0% | Source |
| FY2022 | ~$13.3B | ~-$485.9M | -3.7% | +21.3% | Source |
| FY2021 | ~$10.9B | ~-$38.4M | -0.4% | +22.7% | Source |
| FY2020 | ~$8.9B | ~-$656.5M | -7.4% | +16.5% | Source |
| FY2019 | ~$7.6B | ~-$210.2M | -2.7% | +28.6% | Source |
| FY2018 | ~$5.9B | ~-$88.1M | -1.5% | +28.6% | Source |
| FY2017 | ~$4.6B | ~-$1.4B | -30.2% | +38.6% | Source |
| FY2016 | ~$3.3B | ~-$609.1M | -18.3% | — | Source |
Where the revenue comes from
Netflix
- Streaming membership fees
Roughly 95%+ of revenue
Monthly fees for Standard with Ads, Standard and Premium plans plus extra-member charges. Netflix reports almost all revenue as streaming revenue across four regions.
- Advertising
About 3% of 2025 revenue
Ads sold on the Standard with Ads tier and live events through Netflix Ads Suite. Ad revenue passed $1.5B in 2025 and is expected to roughly double in 2026.
- Other (licensing, consumer products, DVD legacy)
Small, not separately material
Consumer products, Netflix House experiences and other small lines; the DVD service closed in September 2023.
Spotify
- Premium subscriptions
87% (FY2025)
Recurring monthly fees from individual, duo, family, and student plans.
- Advertising
13% (FY2025)
Audio, podcast, video, display, and programmatic advertising sold against free listening and creator inventory.
- Marketplace and creator tools
Not reported separately (Included in main segments)
Promotion, discovery, and creator-facing services that support artists, labels, and publishers.
- Audiobooks and adjacent audio
Not reported separately (Included in main segments)
Listening-hour economics and catalog expansion in selected markets.
Business model and strategy
Netflix
How it makes money
Netflix makes money mainly from monthly membership fees for its streaming service, sold in tiers that range from Standard with Ads to the ad-free Standard and Premium plans, with extra-member fees for people outside a household. Advertising is the second, smaller stream: it passed $1.5B in 2025 and management expects it to roughly double in 2026. Content is the main cost.
Growth strategy
Netflix's growth plan for 2026 rests on four levers: price increases backed by engagement, a larger in-house ad business, live programming such as WWE Raw (which moved to Netflix in January 2025 under a reported 10-year deal) and NFL Christmas Day games, and a broader catalog that includes games and video podcasts. Management guided to 13%-14% revenue growth in 2026 with content expense up about 10%.
Competitive advantage
Netflix's edge is scale relative to rivals that still depend on legacy TV. It crossed 325 million paid memberships in Q4 2025, so a large content budget costs far less per member than it would for a smaller service. Its recommendation system, own content delivery network (Open Connect), app presence on nearly every connected screen, and a library of global originals reinforce that lead.
Spotify
How it makes money
Spotify runs a freemium model. Premium subscriptions (individual, Duo, Family, Student and other plans) generate about 90% of revenue: in Q2 2026 Premium revenue was ~$4.89 billion (EUR4.331 billion) against ~$504 million (EUR446 million) of ad-supported revenue. The free tier monetises through audio, video and podcast advertising and acts as the main funnel into paid plans.
Growth strategy
Spotify is growing along three lines: pricing and plan mix (price increases lifted Premium ARPU 7.4% at constant currency in Q2 2026), new formats (video podcasts, audiobooks in Premium, and partner video such as the September 2026 Genius series deal), and fan products such as Reserved, a Live Nation-backed early ticket access feature launched in the US in 2026.
Competitive advantage
Spotify's advantages are scale, personalization and reach. With 777 million monthly users it has more listening data than any rival dedicated to audio, which feeds features such as Discover Weekly, Daylist and AI DJ. It runs on phones, desktops, consoles, cars, TVs and smart speakers from competing ecosystems, and cultural moments such as Wrapped turn usage data into marketing.
Questions about Netflix vs Spotify
Which company has higher revenue — Netflix, Inc. or Spotify Technology S.A.?
Netflix, Inc. had $45.2B (FY2025), while Spotify Technology S.A. had ~$19.4B (FY2025). By latest annual revenue, Netflix, Inc. is the larger business, with Spotify Technology S.A. showing a smaller revenue base.
What is the market cap of Netflix, Inc. vs Spotify Technology S.A.?
Netflix, Inc.'s market capitalisation stands at $298.9B, while Spotify Technology S.A.'s is $102.0B. Netflix, Inc. carries the higher market valuation, reflecting investors' expectations of its future earnings power relative to Spotify Technology S.A..
How does revenue per employee compare for Netflix, Inc. and Spotify Technology S.A.?
Netflix, Inc. has $2.82M / employee in revenue per employee, while Spotify Technology S.A. has $2.66M / employee. Headcounts may use different dates, so the ratio alone does not establish which business operates more efficiently.
How do Netflix, Inc. and Spotify Technology S.A. make money?
Netflix, Inc. and Spotify Technology S.A. generate revenue in fundamentally different ways. Netflix, Inc.: Netflix makes money mainly from monthly membership fees for its streaming service, sold in tiers that range from Standard with Ads to the ad-free Standard and Premium plans, with extra-member fees for people outside a household. Spotify Technology S.A.: Spotify runs a freemium model.
Which company is valued higher relative to revenue — Netflix, Inc. or Spotify Technology S.A.?
On a price-to-sales (P/S) basis, Netflix, Inc. trades at 6.6x P/S and Spotify Technology S.A. at 5.3x P/S. Netflix, Inc. commands a higher revenue multiple, typically indicating that investors expect faster growth or higher future margins compared to Spotify Technology S.A.. A higher multiple is not inherently better — it may also signal that the stock is priced for perfection.
Is Netflix, Inc. bigger than Spotify Technology S.A.?
By last reported revenue, Netflix, Inc. ($45.2B (FY2025)) is the larger company compared to Spotify Technology S.A. (~$19.4B (FY2025)). Revenue scale is one dimension of size — market capitalisation, employee count, and geographic reach are also relevant depending on the context.
Figures come from each company's filings and the sources linked beside them. Amounts reported in another currency are shown in US dollars at an approximate rate and marked with ~. Back to the Netflix vs Spotify overview