Spotify Forecasts Q4 Operating Income of 820 Million Euros
Spotify expects fourth-quarter operating income to reach 820 million euros, driven by AI-powered features and new licensing deals for fan-made AI covers.
Spotify forecast fourth-quarter operating income of 820 million euros, surpassing the average Wall Street analyst estimate of 813.4 million euros. For the third quarter ending September 30, the Swedish streaming company reported revenue of 4.97 billion euros and operating income of 672 million euros.
The company is integrating AI-powered tools, including an AI DJ and prompt-based playlists, to increase user growth and compete with music-generation platforms Suno and Udio. Spotify expects its premium subscriber base to grow by 10 million to reach 316 million in the fourth quarter, although its monthly active user forecast of 818 million was slightly below expectations.
To support a new paid tool for fan-made AI covers and remixes, Spotify secured licensing agreements with Universal Music Group, Merlin, Kobalt, and Believe. Co-CEO Alex Norstrom stated that the company has built a strong business that keeps compounding and that costs are moderating.
