Post by : Badri Ariffin

Spotify looks set to beat Wall Street forecasts for the fourth quarter, propelled by rising subscriber numbers, targeted price increases and stronger listener engagement. The Swedish streaming company saw its shares climb 5.3% in premarket trading after the update.

The firm has increased the price of its premium individual plan and tightened marketing and staffing expenses to lift margins. This is the first earnings release since CEO Daniel Ek transitioned to an executive chairman role in January and introduced a co-CEO leadership model.

Product innovation remains central to Spotify’s push to retain listeners. The platform launched a long-awaited lossless audio tier aimed at audiophiles, while audiobook listening jumped 36% year over year, led by younger users. A new integration with OpenAI’s ChatGPT also enables conversational, personalised music and podcast recommendations.

For Q4, Spotify anticipates operating income of €620 million, narrowly above analysts’ €618.6 million estimate. It forecasts revenue of €4.5 billion, slightly under the €4.57 billion projection, and expects monthly active users to reach 745 million, above the 737.3 million estimate. Premium subscribers are projected to rise by 8 million to 289 million, a touch below the 290.9 million analyst forecast.

In the third quarter, premium subscribers increased 12% to 281 million and monthly active users grew by 17 million to 713 million, beating expectations. Total revenue climbed 7% to €4.27 billion, ahead of the €4.23 billion analysts had expected.

The company’s emphasis on broader content offerings, better engagement tools and pricing adjustments underlines its strategy to improve profitability while navigating intense competition in the streaming market.

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