Spotify shares jumped more than 9% after the streaming company forecast fourth-quarter operating profit above Wall Street expectations and projected stronger premium-subscriber growth as its artificial-intelligence features gain traction.
Spotify expects fourth-quarter operating income of €820 million, above analysts’ average estimate of €813.4 million.
The company also expects approximately 10 million net new premium subscribers during the quarter, taking the total to about 316 million. Analysts had expected approximately 314.7 million.
Spotify’s AI strategy is becoming an increasingly important part of its growth model.
Features including AI DJ and prompt-based playlists allow users to generate personalized listening experiences, while the company has also expanded integrations with third-party artificial-intelligence platforms and devices.
Nearly 40 million premium subscribers now use Spotify’s mixed-playlist functionality.
The company reported third-quarter revenue of €4.97 billion, narrowly below the €4.98 billion expected by analysts.
Operating income reached €672 million, essentially matching market expectations.
Spotify is attempting to demonstrate that artificial intelligence can increase engagement without destroying the economics of licensed music distribution.
That issue has become increasingly important as generative-AI music platforms compete for users while record labels and streaming services negotiate how AI-generated and AI-modified music should be licensed.
Spotify has already reached agreements with music-industry partners involving a planned paid product allowing users to create AI-assisted covers and remixes.
The company’s profitability is also receiving greater attention.
Spotify expects operating-expense growth to peak in the third quarter before moderating during the fourth quarter and into 2027.
For investors, the combination of subscriber growth, improving operating leverage and stronger AI engagement provides evidence that Spotify’s technology investment could strengthen rather than cannibalize its core streaming business.
The next test will be whether the projected 10 million subscriber additions materialize during the holiday quarter and whether AI-driven engagement translates into sustained revenue and margin growth.
