Spotify forecasts fourth-quarter operating profit of 820 million euros, beating estimates
Key Facts
Spotify forecast operating profit of 820 million euros for the fourth quarter of 2026, Reuters reported in its coverage of the company's results on October 22, exceeding analysts' estimates for the period. Those estimates averaged 813.4 million euros, according to London Stock Exchange Group data, putting the company's profit forecast above the level analysts had expected. The guidance followed actual operating profit of 672 million euros in the third quarter, also slightly above expectations. Analysts' estimates for that quarter averaged 671.8 million euros, according to Visible Alpha data cited by Reuters. The music streaming platform reported third-quarter revenue of 4.97 billion euros, compared with estimates of 4.98 billion euros from London Stock Exchange Group, leaving sales slightly below expectations despite operating profit beating them.
The quarterly results follow operating profit of 655 million euros in the second quarter of 2026, according to Spotify's filing with the U.S. Securities and Exchange Commission. The company ended that quarter with a record gross margin of 33.4%, describing the level in the filing as an "all-time high." Free cash flow for the same period was 797 million euros, alongside the operating profit the company recorded that quarter. For comparison with the corresponding seasonal period, Spotify reported operating profit of 701 million euros in the fourth quarter of 2025, according to its earnings release published on its website. Gross margin in that quarter was 33.1%, having improved by 83 basis points year on year, according to the same release.
Spotify's investor relations website lists a user base of 788 million, including 306 million subscribers, according to figures displayed on October 22, 2026. That base spans 184 markets, according to the website, defining the scope of the company's operations underpinning its forecasts for the coming period. Spotify's artificial intelligence tools include a service that provides personalized music selections with voice commentary, according to Reuters' description of the service in its coverage. In August 2026, the company also announced approval of an additional $1.5 billion increase in its share repurchase program, according to an investor relations statement. The company said in its statement that it had "approved an additional $1.5 billion increase in its share repurchase program."
Spotify shares rose more than 3% in volatile trading before the October 22 session opened, according to Reuters. Ahead of the results, Rosenblatt maintained its neutral rating on the stock, according to Investing.com coverage dated October. The firm also kept its price target at $527 per share in its assessment before the results. For the fourth quarter of 2026, Spotify targets 818 million monthly active users, compared with Visible Alpha estimates of 819 million. The company also targets 316 million paid subscribers for the same period, exceeding analysts' estimates of 314.7 million subscribers.