Spotify Hits 306M Premium Subscribers

Spotify exceeded subscriber expectations in the third quarter, posting double-digit gains in revenue and operating income that helped offset roughly €1 billion ($1.1 billion) in operating expenses.

Total revenue climbed 14% in constant currency to €4.97 billion ($5.63 billion) for the quarter ended Sept. 30. The company added 6 million net new premium subscribers—1 million above guidance—bringing the total to 306 million. Premium revenue rose 15% year over year to €4.5 billion ($5.08 billion).

Monthly active users increased 11% to 788 million, in line with guidance, as Spotify’s multi-quarter rebuild of its advertising technology began to show results. Ad-supported revenue grew 9% in constant currency to €482 million ($546 million).

“This was a quarter where we did what we said,” co-CEO Alex Norström said in a statement. “We’ve built a strong business that keeps compounding, we invest when we see a path for growth [and] our costs are moderating. We also have the most passionate and engaged music, podcast and book fans in the world on our platform. That’s why we continue to grow and take share.”

Operating income rose 12% in constant currency to €672 million ($761 million). Gross margin expanded 136 basis points to 33%, driven by improvements in both segments: premium gross margin reached 34.5% (up 130 bps) and ad-supported gross margin hit 18.7% (up 105 bps).

Operating margin came in at 13.5%, slightly below 13.7% a year earlier and 13.6% in the prior quarter. As a streaming service, Spotify spends well over half of every revenue dollar on content costs; in 2025 it paid more than $11 billion to the music industry. Operating margin reflects the operational leverage management can generate elsewhere in the business.

Operating expenses rose about 26% year over year to €967 million ($1.1 billion), or 19% in constant currency after excluding payroll taxes tied to employee share-based compensation (social charges). Social charges totaled €22 million ($24.9 million), €13 million ($14.7 million) above expectations. The company attributed the remaining increase primarily to temporarily elevated marketing and cloud/AI spending. Operating expenses as a percentage of revenue stood at 19%; while the figure ticked up slightly in the quarter, the metric has trended downward since late 2023.

For the fourth quarter, Spotify guided for 30 million net new MAUs (to 818 million) and 10 million net new premium subscribers (to 316 million). It expects revenue of €5.2 billion, operating income of €820 million ($929 million), and a gross margin of 33.8%.