Spotify forecasts higher fourth-quarter profit as AI features support holiday growth

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Spotify Q4 profit forecast with AI

Highlights

Spotify forecasts fourth-quarter operating income of 820 million euros, above LSEG consensus of 813.4 million euros, with premium subscribers expected to reach 316 million, surpassing estimates.
Third-quarter operating income was 672 million euros, aligning with analysts' forecasts, while revenue of 4.97 billion euros slightly missed the estimated 4.98 billion euros.
Shares rose over 3% premarket as Spotify highlights AI-powered features like AI DJ and prompt-based playlists as key drivers of user growth and engagement against rising competition.

Fourth-quarter outlook and third-quarter results

As reported by Reuters, Spotify expects fourth-quarter operating income of 820 million euros, above the analysts' average estimate of 813.4 million euros based on LSEG data. The company says monthly active users are expected to reach 818 million in the quarter, just below Visible Alpha estimates of 819 million, while premium subscribers are forecast to rise by 10 million to 316 million, ahead of expectations for 314.7 million.

In the third quarter, Spotify reports operating income of 672 million euros, broadly in line with analysts' average estimate of 671.8 million euros compiled by Visible Alpha. Revenue comes in at 4.97 billion euros, compared with estimates of 4.98 billion euros, according to LSEG data.

Shares in the company are last up more than 3% in volatile premarket trading. Co-CEO Alex Norstrom says in a statement that Spotify is building a strong business, is investing where it sees a path for growth, and is seeing costs moderate.

AI investment and competitive pressure

Spotify is using AI-powered features including its AI DJ, which curates personalized music mixes with spoken commentary, and prompt-based playlists that generate selections based on a listener's stated mood or preference. The company is betting that these tools improve discovery and engagement on the platform at a critical time for seasonal user growth.

That strategy is closely watched by investors as Spotify works to attract more users and defend its position against emerging AI music rivals such as Suno and Udio. Stronger premium subscriber growth in the fourth quarter could help reinforce the case that AI spending is supporting both expansion and profitability.

In our earlier article on CEOs’ early results from AI agents, we noted that many large U.S. companies are seeing incremental efficiency and growth gains, even as only a small share currently view the technology as truly transformational. The piece also highlighted that executives expect continued hiring and retraining, alongside sustained investment in AI infrastructure as adoption broadens across core workflows.

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