Shares of Spotify Technology (SPOT) jumped more than 11% on Thursday after the company reported strong third-quarter growth across its key business metrics.
The music streaming giant added millions of new users during the quarter, with monthly active users climbing 11% year over year to reach 788 million globally.
Spotify has continued to successfully convert free listeners into paying customers by offering premium features including ad-free listening, offline downloads, and higher-quality audio.
Premium subscribers grew 9% year over year, bringing the total number of paying customers to 306 million by the end of the third quarter.
Total revenue for the quarter climbed 16% to 5 billion euros, equivalent to roughly $5.6 billion, reflecting strong demand across both its free and premium tiers.
The company’s profitability also improved meaningfully, with gross margin expanding by 1.4 percentage points to reach 33% during the quarter.
That margin improvement helped push operating income up by 15% to 672 million euros, or approximately $754 million, signaling that Spotify’s business model is scaling effectively.
Looking ahead, Spotify expects monthly active users to grow to 818 million in the fourth quarter, with premium subscribers reaching 316 million.
The company is also forecasting fourth-quarter revenue of 5.2 billion euros and operating income of 820 million euros, pointing to continued momentum as it heads into the new year.
Spotify plans to expand its audiobook offerings to more than 180 markets by the end of the year while also launching new tools designed to help creators better monetize their work on the platform.
Co-CEO Alex Norstrom summed up the company’s growth strategy clearly: “Every time we expand what’s on Spotify, we bring in new listeners and give existing ones more reasons to come back, almost every day.”
The results reinforce what has become a reliable expansion formula for Spotify, one built on continuously adding value for both listeners and artists to drive deeper engagement and longer platform sessions.
