Spotify(US:SPOT) Benzinga·2025-11-04 18:20Core Insights - Spotify Technology SA's third-quarter 2025 performance surpassed expectations, driven by strong premium subscriptions, user growth, and improved ad-supported profitability [1][2] Financial Performance - Total revenue increased by 7% year-over-year to 4.27 billion euros ($4.90 billion), exceeding Goldman Sachs' forecast of 4.20 billion euros and the Street's estimate of 4.23 billion euros [4] - Premium revenue reached 3.83 billion euros, outperforming both Goldman Sachs' and consensus estimates, while ad-supported revenue was 446 million euros, slightly below forecasts [4] - Gross margins expanded to 31.6%, surpassing Goldman Sachs' and consensus estimates of 31.1%, with premium margins at 33.2% and ad-supported margins improving to 18.4%, up 525 basis points year-over-year [5] Subscriber Growth - The platform added five million premium subscribers, totaling 281 million, and gained 17 million monthly active users (MAUs), reaching 713 million, which was modestly ahead of projections [4] Operating Income and Earnings - Operating income was 582 million euros, significantly above Goldman Sachs' estimate of 486 million euros and the Street's estimate of 501 million euros, resulting in an operating margin of 13.6% [6] - Earnings per share were reported at 3.28 euros, far exceeding forecasts of 2.02 euros (Goldman) and 1.96 euros (consensus) [6] Future Outlook - Spotify's fourth-quarter 2025 guidance suggests continued margin strength, with expected total revenue of 4.5 billion euros, slightly below analyst estimates [7] - The company anticipates premium subscribers to reach 289 million and MAUs to rise to 745 million, with forecasted gross margins of 32.9% and operating income of 620 million euros, both ahead of prior estimates [7]