Spotify 3Q Revenue Rises on Premium Subscribers Additions, Despite Higher Expenses

By Josee Rose

Spotify Technology said it added more premium subscribers in the third quarter, driving revenue higher. However, total costs increased, pushing earnings down.

Spotify said its premium subscribers totaled 306 million in the quarter, up 2% sequentially, and 9% year over year. It posted increases across all its global regions.

The company's monthly active users grew by 11% year-over-year to 788 million, compared with analyst expectations of 788.16 million users, according to FactSet. Overall, the company added 11 million monthly active users during the quarter.

Shares recently were up 3.9% in premarket trading, at $545.92.

Quarterly net income was EUR518 million, or EUR2.48 a share, compared with EUR899 million, or EUR3.28 a year earlier. Revenue was about 5 billion euros, equivalent to about $5.6 billion, up from a year earlier.

Analysts polled by Factset were expecting earnings of EUR2.80 a share and revenue of EUR4.98 billion.

The company's gross margin hit 33%.

Its third-quarter operating expenses rose 26% from the prior period, the company said.

The audio streaming app cited temporarily elevated growth in marketing and cloud/AI-related spending for its new features. It recently rolled out listener-generated, AI-powered podcasts and is developing an AI tool that lets music fans make remixes and cover songs within the app as a paid add-on.

Looking ahead, Spotify expects revenue of EUR5.2 billion in the fourth quarter, and to add roughly 30 million new monthly active users in the fourth quarter, bringing the total to 818 million. Meanwhile, it expects 316 total premium subscribers in the quarter.

Spotify executives have said the company is moving into an era of AI generation. The company said it plans to add its Audiobooks collection to more than 180 markets by the end of the year, with more than 800,000 titles, while bringing the Spotify Partner Program to 35 more markets, and still plans to launch its Creator Memberships.

"Spotify is in one of the few categories that actually stands to thrive in the agentic age," Gustav Söderström, co chief executive, said. "This is because agents excel at replacing and taking care of things people would rather not do. People love getting rid of chores. But entertainment is the opposite. Nobody asks an agent to "summarize a song" for them. The whole point of getting rid of those chores is to free up even more time for the things that you actually enjoy."

This week, the streamer launched a program called Spotify Memberships, which gives podcasters the option to offer paid access to content, among other features, in the app.

Meanwhile, Spotify has been renewing deals with major podcasters, such as Joe Rogan, in a multiyear agreement estimated to be worth $250 million. The show was reaching about 28.4 million Americans per week in the second quarter of this year, according to Edison, up from 6.6 million at the beginning of 2020. The show has more than 18 million followers on Spotify, and more than 21 million on YouTube.

Write to Josee Rose at josee.rose@wsj.com

(END) Dow Jones Newswires

October 22, 2026 07:12 ET (11:12 GMT)