Music streamer Spotify saw third quarter operating profits grow a cool 28%, as its paying subscribers hit 281 million.
Operating income posted at €582M ($669M), well above the guidance of €485M, with revenue up 7% at €4.27B. Total active monthly users (MAUs) came in at 713 million, up 11% year-over-year and 2% on Q2. Compounding the strong results, free cash flow was up 13% to a record high of €806M.
Spotify said the MAU and premium subscriber growth reflected gains across all regions, and came after the business launched 30 product updates during the fall, including lossless audio, playlist mixingtools, messaging, an enhanced mobile free tier and taste profile controls.
However, it wasn’t all good news, as ad-supported revenue fell 6% to €446M, despite the number of ad-supported MAUs rising 11% to 446 million.
In remarks to shareholders, the company touted the results, and said: “Overall, we are very pleased with our performance heading into year-end and view the business as well positioned to deliver growth and improving margins in 2025 as we reinvest to support our long-term potential.”
As for the future, expectations for Q4 are total MAUs of 745 million, which would be a rise of 32 million in the quarter; eight million more paying subscribers leading to 289 million there; total revenue of €4.5B based on Q3 currency rates; a gross margin of 32.9%; and operating income of €620M.
Spotify founder and CEO Daniel Ek is set to move to an Executive Chairman post on January 1, 2026, with key lietenants Gustav Söderström and Alex Norström becoming co-CEOs.
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