Spotify passes 306 million paying subscribers, and its stock jumps 10%
Third-quarter results beat forecasts, monthly users reached 788 million, and a paid AI remix add-on is gaining label support.
Spotify's third-quarter results, released on October 22, came in ahead of expectations. The company reported 306 million Premium subscribers, about one million more than it had forecast, and 788 million monthly active users, up 11% from a year earlier.
Revenue grew about 16% year on year, and gross margin came in at 33%, slightly above guidance. Investors liked what they saw: the stock rose around 10% to a ten-month high, and several analysts, including Morgan Stanley and Bernstein, raised their price targets in the days that followed.
For the fourth quarter, Spotify expects to reach 316 million subscribers and 818 million monthly users.
The company is also pushing new paid features. A fan remix tool powered by AI is being marketed as a paid add-on to Premium. Universal Music Group signed on in May, and this week the independent-label agency Merlin joined too. No price or launch date has been announced, and critics question whether fans will pay extra for it.
