Spotify is heading into the final quarter of 2025 on solid footing, projecting stronger profits and faster user growth as it benefits from price adjustments, new product launches, and the year-end surge in music streaming.
The Swedish streaming platform expects operating income of €620 million for the fourth quarter, slightly above market expectations of €618.6 million, and revenue of around €4.5 billion.
Spotify forecasts total monthly active users (MAUs) to hit 745 million by year-end, ahead of the estimated 737.3 million.
The upbeat outlook follows a great third quarter that saw double-digit growth across key metrics. Premium subscribers climbed 12% year-on-year to 281 million, while total monthly active users rose 11% to 713 million. Revenue increased 7% to €4.27 billion, exceeding analyst expectations of €4.23 billion.
Gross margin improved to 31.6%, with operating income reaching €582 million. CEO Daniel Ek attributed the progress to better execution and a clear focus on long-term growth.
“The business is healthy. We’re shipping faster than ever. And we have the tools we need – pricing, product innovation, operational leverage, and eventually the ads turnaround – to deliver both revenue growth and profit expansion,” Ek said.
“It all comes back to user fundamentals and that’s where we are: 700 million users who keep coming back, engagement at all-time highs. We’re building Spotify for the long-term.”
Spotify has been repositioning its business to improve profitability after years of aggressive spending on marketing and content acquisition. The company recently increased the price of its premium individual plan and streamlined operational costs to strengthen its bottom line.
At the same time, Spotify has rolled out several updates aimed at enhancing user engagement. The long-awaited lossless audio feature, part of the new “Supremium” tier, launched in October, offering high-fidelity sound that rivals Apple Music’s and Amazon’s premium options.
The tier also introduces advanced playlist tools, AI-powered recommendations, and wider audiobook access.
The audiobook segment is one of Spotify’s fastest-growing categories. Listeners in this segment jumped 36% year-on-year, while total listening hours grew 37%. The company has continued to expand its audiobook catalogue globally, making it a major complement to its music and podcast offerings.
Aiming to tap into younger audiences and enhance discovery, Spotify also partnered with OpenAI in October. The collaboration allows users to link their Spotify accounts within ChatGPT and request music or podcast recommendations through conversational prompts, an integration designed to increase engagement and retention.
Beyond product expansion, Spotify is entering a new phase of leadership. Starting January 2026, Daniel Ek will transition to Executive Chairman as the company adopts a co-CEO structure led by Gustav Söderström and Alex Norström.
The restructuring aims to enhance innovation and simplify decision-making as Spotify pushes deeper into audiobooks, AI, and next-generation audio streaming.
With user growth speeding up and operational discipline improving, Spotify appears to be turning a corner from years of narrow margins to sustained profitability, preparing for a strong close to 2025 and a more balanced strategy.
Comments 1