Operating Profit Target of 820 Million Euros and the Fourth-Quarter Forecast
Spotify projected a fourth-quarter operating profit of 820 million euros on Thursday, edging past the Wall Street consensus estimate of 813.4 million euros compiled by LSEG data. The streaming platform’s shares rose nearly 4% in pre-market trading following the guidance release.
The company outlined a targeted fourth-quarter revenue figure of 5.2 billion euros alongside a projected gross margin of 33.8%. Premium subscribers are expected to grow by 10 million to reach 316 million, while monthly active users are forecasted to climb by 30 million to hit 818 million. These subscriber projections compare against Visible Alpha survey data cited by Reuters, which anticipated 314.7 million premium users and 819 million monthly active users.
AI Tools Help Spotify Compete with Music Startups
To capture user growth through the holiday season, the platform relies heavily on algorithmic tooling and conversational interfaces. Current features include the AI DJ, which curates customized song sets alongside synthesized voice commentary, and prompt-based playlist generation that builds listening sessions from user-submitted mood or taste descriptions.
Investors are monitoring platform profitability closely as capital pours into these discovery-focused systems. The expansion aims to maintain a competitive footing against generative music startups such as Suno and Udio.
Spotify Reports Third Quarter Revenue of 4.97 Billion Euros
During the third quarter, Spotify reported revenues of 4.97 billion euros—representing a 16% year-over-year increase—and an operating profit of 672 million euros. The gross margin settled at 33.0% with earnings per share landing at 2.48 euros. Operating profit outperformed internal company projections as marketing and personnel expenditures tracked below initial forecasts.
Analyst estimates collected by Reuters had targeted third-quarter revenues at 4.98 billion euros with earnings per share at 2.80 euros, while consensus operating profit sat at 671.8 million euros. Premium subscriptions grew by 6 million during the quarter to reach 306 million, and monthly active users expanded by 11 million to total 788 million.
Executive Outlook on Cost Moderation and Expansion
“We have built a strong business that is evolving, we are investing when we see a growth pathway, our costs are moderating, and there is even more headroom ahead,” Co-CEO Alex Norström stated, according to Variety. In a parallel statement: “In this quarter, we have implemented what we announced. We have built a strong company that continuously grows, invest when we see a growth pathway, our cost development is improving, and there is still significant potential ahead of us.”
