Spotify Revenue Climbs as AI Spending Weighs on Quarterly Earnings

The company’s monthly active user count reached 788 million, an 11% increase year-over-year that fell just shy of FactSet analyst projections. Despite the dip in net income compared to the 899 million euros reported in the same period last year, the market reacted positively, with shares climbing 3.9% to $545.92 in premarket trading.

Driving the surge in costs are internal efforts to embed generative AI into the platform. Spotify is currently testing AI-powered podcasts and tools for music fans to create remixes and covers as paid add-ons. Co-CEO Gustav Söderström framed these investments as a strategic pivot into an "agentic age," arguing that while AI excels at automating chores, Spotify’s core entertainment value remains human-centric. To bolster its creator economy, the company recently debuted "Spotify Memberships," allowing podcasters to offer paid subscriber access, and is renewing high-profile deals, including a multiyear agreement with Joe Rogan estimated at $250 million.

Looking toward the end of the year, leadership anticipates revenue hitting 5.2 billion euros in the fourth quarter. The company plans to reach 818 million monthly active users and 316 million premium subscribers, while expanding its audiobook library to over 180 markets.