Spotify vs Substack: Revenue, Profit and Business Model
Spotify reported ~$19.4B of revenue in FY2025 and ~$2.5B of net income. Substack reported $45M of revenue in FY2025 and — of net income.
Latest financial snapshot
Financial summary
Spotify
Spotify spent most of its history losing money, posting net losses every year from 2016 through 2023, including ~$601 million (EUR532 million) in 2023. Price increases, a 2023 cost reset and podcast restructuring changed that: net income reached ~$1.29 billion (EUR1.138 billion) in 2024 and ~$2.5 billion (EUR2.212 billion) in 2025 on revenue of ~$19.4 billion (EUR17.186 billion). In Q2 2026 gross margin reached a record 33.4%, free cash flow was ~$901 million (EUR797 million), and the company held ~$10.6 billion (EUR9.4 billion) of cash and short-term investments while buying back shares.
Substack
Substack is private and publishes no audited financials. Its revenue comes mainly from a 10% fee on paid subscriptions sold by creators. Newcomer reported in 2025 that Substack told investors it had about $45 million in annual recurring revenue. Funding includes a $15.3M Series A led by Andreessen Horowitz (2019), a $65M Series B at a reported.1B valuation (2021), roughly $7.8M from a 2023 Wefunder community round, and a $100M Series C led by BOND and The Chernin Group at a $1.1B valuation (July 2025). That valuation implies a revenue multiple of roughly 24x on reported ARR.
Revenue and profit by year
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 |
Substack
| Year | Revenue | Net income | Margin | Growth | Source |
|---|---|---|---|---|---|
| FY2025 | $45M | — | 0.0% | — | Source |
Where the revenue comes from
Spotify
- Premium subscriptions
Recurring monthly fees from individual, duo, family, and student plans.
- Advertising
Audio, podcast, video, display, and programmatic advertising sold against free listening and creator inventory.
- Marketplace and creator tools
Promotion, discovery, and creator-facing services that support artists, labels, and publishers.
- Audiobooks and adjacent audio
Listening-hour economics and catalog expansion in selected markets.
Substack
- Paid subscription fee (10%)
Majority (not disclosed)
A 10% cut of the subscription revenue readers pay to creators; Stripe processing fees are separate.
- Other fees
Small (not disclosed)
Smaller charges such as the one-time custom domain fee.
Business model and strategy
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.
Substack
How it makes money
Substack is free to use for free publications. When a writer turns on paid subscriptions, Substack takes 10% of the revenue and Stripe charges its standard card fees. Substack does not run ads on publications. Revenue therefore scales with creator earnings, which is why the company invests in discovery features (recommendations, Notes, the app) that help writers sell more subscriptions.
Growth strategy
Substack's growth strategy centres on making its app a destination rather than just an email tool: Notes, recommendations, video and livestreaming give readers reasons to open the app and help writers find subscribers internally. It also recruits creators from other platforms, including a reported $20 million fund launched in 2025 to attract video creators.
Competitive advantage
Substack's core advantage is distribution: its app, Notes feed and cross-publication recommendations help writers gain subscribers inside the network, which standalone email tools struggle to replicate. Writers also keep their mailing lists, which lowers the risk of joining.
Questions about Spotify vs Substack
Which company has higher revenue — Spotify Technology S.A. or Substack Inc.?
Spotify Technology S.A. reported ~$19.4B (FY2025), while Substack Inc. reported $45.0M (FY2025). By last reported revenue, Spotify Technology S.A. is the larger business, with Substack Inc. reporting a smaller revenue base.
What is the market cap of Spotify Technology S.A. vs Substack Inc.?
Spotify Technology S.A. has a market capitalisation of $102.0B. A public market cap figure for Substack Inc. was not available (it may be privately held).
Which is more financially efficient — Spotify Technology S.A. or Substack Inc.?
Spotify Technology S.A. generates $2.66M / employee in revenue per employee. A comparable figure for Substack Inc. requires matching employee and revenue data from the same reporting period.
How do Spotify Technology S.A. and Substack Inc. make money?
Spotify Technology S.A. and Substack Inc. generate revenue in fundamentally different ways. Spotify Technology S.A.: Spotify runs a freemium model. Substack Inc.: Substack is free to use for free publications.
Is Spotify Technology S.A. bigger than Substack Inc.?
By last reported revenue, Spotify Technology S.A. (~$19.4B (FY2025)) is the larger company compared to Substack Inc. ($45.0M (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 Spotify vs Substack overview