Spotify's profit jumps after streaming service increases prices and attracts more subscribers

By Steve Goldstein

Daniel Ek, who will become executive chairman at Spotify in January, presided over a quarter in which subscriber numbers grew.

Streaming giant Spotify Technology said its third-quarter profit virtually tripled after attracting users who were willing to pay for the service.

Spotify said its net income rose to EUR899 million ($1 billion) from EUR300 million after a quarter in which revenue rose 7% to EUR4.27 billion.

Its operating income of EUR582 million beat the Visible Alpha-compiled estimate of EUR531 million, with analysts expecting revenue of EUR4.23 billion.

Spotify said at constant currencies, revenue rose 12%, the same growth rate for premium subscribers.

Spotify said its monthly active users of 713 million beat company guidance of 710 million, while premium subscribers of 281 million fell in line with guidance.

While Spotify is growing subscribers, the average revenue per premium subscriber fell 4% year-on-year, or flat excluding currency swings, as increased prices were offset by the product and market mix. Similarly, ad revenue fell 6% year-on-year, or was flat at constant currencies.

For the fourth quarter, the company is targeting 32 million new active users, 8 million new premium subscribers, revenue of EUR4.5 billion and operating income of EUR620 million. Analysts had been expecting an operating profit of EUR640 million on sales of EUR4.57 billion.

Spotify shares (SPOT) rose 3% in premarket trade, even with the cautious guidance. The stock has jumped 44% this year.

-Steve Goldstein

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11-04-25 0740ET