Spotify shares jumped 10% at $572 billion Thursday to a 10-month high as the music streaming giant hit 306 million premium subscribers in the September quarter (up 9% year on year) – one million ahead of forecasts, and with growth across all regions. It guided to another 10 million net ads in the current fourth quarter.
Q3 monthly active users (MAUs) came in at 788 million, up 11%.
Revenue jumped 16% year on year to €5 billion ($6.5 million), in line. Earnings skimmed forecasts, gross margins improved. Ads sales grew 9%, up from 3% in each of the previous two quarters. Spotify has low debt, which is reassuring at a time of higher interest rates, and a robust war chest.
The co-CEOs of the Stockholm-based global streamer talked up the company’s AI integration and successful push into audiobooks – which, in Sweden, are apparently almost as popular as music, they said. Spotify’s video podcast consumption is up over 140% since launch with more than 560 million users having streamed a video podcast on the platform. It recently re-upped with popular host and podcast The Joe Rogan Experience.
It has about 800 audiobook titles now and is expanding access to more than 180 markets by year end.
During the quarter, the company leaned in on using artificial intelligence to personalize listening, including a “taste profile” for U.S. premium users. It also launched an integration with Meta’s Muse to expand options for listeners.
“By connecting Muse to Spotify, listeners can ask their agent to play music, save songs to their library, build personalized playlists, find new books, podcasts and more,” the company said.
“It’s an agent you can talk to, ask Spotify to go through your listening history back many years and note your favorite listening and create a playlist. You can also ask Spotify who wrote and performed on each track,” elaborated co-CEO Gustav Söderström, adding, that company “actually stands to thrive in the agentic age.”
On the flip side, it announced yesterday it had taken down more than 50 million AI-generated slop and spam tracks out of recommendations over the past year — in addition to more than 75 million spammy tracks we’ve removed from our platform altogether for serious or repeated violations of our rules.
The Spotify Partner Program moved into 35 more markets, and the company launched new Creator Memberships.
“This was a quarter where we did what we said. We’ve built a strong business that keeps compounding, we invest when we see a path for growth, our costs are moderating, and there is more runway ahead,” said co-CEO Alex Norström.