Spotify’s Q3 report shows continued strong growth, with revenue reaching €3.99 billion (₹38,670 crore) and an increase of 6 million subscribers, the company announced on Tuesday (Nov. 12).
Despite early challenges in profitability, the Swedish streaming giant has recently focused on boosting both growth and financial performance. After significant cost-cutting measures last year, including workforce reductions, Spotify’s latest quarterly results reflect substantial improvements in profit margins and efficiency, all while maintaining subscriber momentum.
Revenue came in just shy of Spotify’s forecast of €4 billion (₹38,750 crore), but operating profit hit a record €454 million (₹4,390 crore), surpassing expectations by 12%. This marked a 70% increase in operating profit from the previous quarter and a more than 14-fold rise from the same quarter last year.
Spotify’s gross margin also saw gains, reaching €1.24 billion (₹12,010 crore) or 31.1% of revenue, boosted by premium subscriptions, audiobooks, and ad-supported streams. The platform’s recent price hikes in major markets didn’t slow its subscriber growth, with total premium subscribers now at 252 million, a 6 million increase from the prior quarter and up 11.5% from last year. Subscription revenue grew by 20.8% year-on-year to €3.51 billion (₹34,020 crore).
Advertising revenue, though lagging behind subscriptions, reached €472 million (₹4,570 crore), up slightly from the previous quarter. Music and podcast advertising both faced challenges with pricing, though ad impressions saw growth.
These positive results pushed Spotify’s stock up over 9% in after-hours trading, with shares reaching $459, surpassing previous highs and reflecting investor confidence in the company’s profitability and growth trajectory.
