Spotify subscribers rise to 306 million as revenue grows and earnings per share fall
Key Facts
Spotify reported on October 22, 2026 that paid subscribers rose to 306 million in the third quarter, alongside higher revenue and an improved gross margin. The company said in its earnings release that its paid subscriber base grew 9% from the same period a year earlier. Total monthly active users reached 788 million during the quarter, a measure of the platform's broader audience alongside its paid subscriber base. Monthly active users grew 11% year on year, outpacing paid subscriber growth over the same period. The company posted revenue of 4,969 million euros, according to its shareholder presentation, which its earnings release rounded to about 5.0 billion euros. Reported revenue rose 16% year on year, outpacing growth in both users and paid subscriptions. Excluding the impact of exchange-rate movements, Spotify said revenue grew 14% from the third quarter of the previous year.
On profitability, Spotify's gross margin improved to 33.0% in the third quarter, up 136 basis points year on year, according to the company's statement. Operating profit for the period was 672 million euros, according to the shareholder presentation, as spending on marketing and technology infrastructure continued. Diluted earnings per share were 2.48 euros in the third quarter of 2026, down from the quarterly and annual comparison figures in the presentation. Diluted earnings per share had reached 2.61 euros in the second quarter of the same year before declining in the current period. They were also below the 3.28 euros recorded in the third quarter of 2025, despite revenue growth and an improved gross margin. Free cash flow was 735 million euros, down 9% year on year, a financial measure outside those defined under International Financial Reporting Standards. Spotify attributed operating expense growth to investments whose increase it described as temporary, citing spending on "marketing, cloud computing and artificial intelligence" in its presentation.
In a parallel expansion of its audiobook services, Spotify announced on October 7, 2026 that subscribers to its paid audiobook add-on had exceeded one million. The company said in its announcement that annual recurring revenue from the service had exceeded $100 million, alongside disclosing the size of its subscriber base. The audiobook expansion planned through the end of the year extends to Arab markets, as part of the company's plans to make the service available in additional markets. The list of markets set to receive audiobooks includes Saudi Arabia, the United Arab Emirates and Egypt, according to Spotify's geographical expansion announcement. The company said "pricing and access models vary by market," as part of the audiobook availability arrangements it announced before the third-quarter results.
For the fourth quarter of 2026, Spotify expects total monthly active users to reach 818 million, according to guidance in its shareholder presentation. The company is targeting 316 million paid subscribers for the same period, as part of its audience and subscription forecasts for the following quarter. On the business front, Spotify forecast fourth-quarter revenue of 5.2 billion euros, alongside its new user and subscriber targets. It is also targeting a gross margin of 33.8% for the period, above the margin it reported for the third quarter. The company expects operating profit to reach 820 million euros in the fourth quarter, bringing together audience and revenue growth with a higher margin and operating profit in its stated outlook for the coming period.