Key Moments
- Spotify projects fourth-quarter operating income of €820 million, above the €813.4 million average analyst estimate.
- Third-quarter operating income reached €672 million and revenue came in at €4.97 billion, both essentially matching analyst expectations.
- The company anticipates 818 million monthly active users and 316 million premium subscribers in the fourth quarter.
Profit Outlook Tops Expectations
Spotify forecast fourth-quarter profit above Wall Street expectations, signaling confidence that its investments in artificial intelligence features will support user and revenue momentum during the key holiday period.
The company projects operating income of €820 million ($920.53 million) for the fourth quarter. That compares with an average analyst estimate of €813.4 million, based on data compiled by LSEG.
In volatile premarket trading, Spotify shares were last up more than 3% following the outlook.
AI Features at the Center of Growth Strategy
Spotify is emphasizing AI-driven tools to deepen engagement, improve discovery on its platform, and underpin user growth. Among its offerings is an AI DJ that curates individualized music mixes featuring spoken commentary. The service also provides prompt-based playlists, where users describe a mood or listening preference and receive customized playlists built around those inputs.
Investors are paying close attention to the company’s profitability as it accelerates spending on AI initiatives aimed at attracting and retaining users, while also countering competitive pressure from emerging AI music-generation platforms such as Suno and Udio.
Third-Quarter Results in Line With Estimates
For the third quarter, Spotify reported operating income of €672 million, essentially in line with the €671.8 million average analyst forecast compiled by Visible Alpha.
Quarterly revenue totaled €4.97 billion, compared with analyst expectations of €4.98 billion, according to LSEG data.
“This was a quarter where we did what we said. We’ve built a strong business that keeps compounding, we invest when we see a path for growth, our costs are moderating, and there is more runway ahead,” co-CEO Alex Norstrom said in a statement.
| Metric | Reported / Guidance | Analyst Estimate | Source |
|---|---|---|---|
| Q3 Operating Income | €672 million | €671.8 million | Visible Alpha |
| Q3 Revenue | €4.97 billion | €4.98 billion | LSEG |
| Q4 Operating Income Guidance | €820 million | €813.4 million | LSEG |
User and Subscriber Guidance
Spotify issued mixed guidance for user metrics in the fourth quarter. The company expects monthly active users to reach 818 million, a figure that is slightly below Visible Alpha’s estimate of 819 million.
However, Spotify’s premium subscriber outlook is more upbeat. It anticipates a 10 million increase in premium subscribers, bringing the total to 316 million. That compares favorably with Visible Alpha’s estimate of 314.7 million.
The company’s guidance and results are provided using a reference exchange rate of $1 = 0.8908 euros.
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