Spotify Tops Q3 Paid Subscriber Estimates, Adds 6 Million Premium Users on AI Personalization Push

Spotify beat Wall Street estimates for third-quarter premium subscriber growth, adding 6 million paid users — about 1 million above guidance — as AI-driven personalization features boosted subscription value. The paid base reached 306 million, up 9% year over year. Premium subscriber revenue rose 17% year over year on subscriber growth and price increases. Free, ad-supported monthly active users grew 12% to 499 million globally. Q3 revenue of €4.97 billion was roughly in line with the €5 billion guidance, while the 33% gross margin slightly beat guidance. Ad revenue grew 10% year over year, still trailing premium growth. Co-CEO Gustav Söderström said the company made "a pretty big investment earlier this year" in a "large taste model" and other AI features now paying off in engagement, citing a double-digit increase in music discovery. Co-CEO Alex Norström said rising cash flow funds organic investment while returning excess capital to shareholders via buybacks. Spotify also recently expanded audiobook access to more than 180 markets from 22.