Spotify reported revenue of €4.3 billion, up 7 percent year over year, during the third-quarter of 2025.
Premium revenue of Spotify rose 9 percent to €3.83 billion, supported by 12 percent growth in subscribers. Ad-supported revenue declined 6 percent due to pricing softness and optimization of podcasting inventory. Gross margin reached 31.6 percent, and operating income climbed to €582 million, reflecting a 13.6 percent margin. Improved marketing efficiency, lower personnel-related costs, and gross margin strength contributed to higher profitability.
Subscribers and User Growth
Spotify surpassed 700 million monthly active users (MAUs) for the first time, reaching 713 million, an 11 percent increase. The company added 17 million MAUs in the quarter. Premium subscribers grew 12 percent to 281 million.
Regionally, Europe accounts for 26 percent of total MAUs and 37 percent of Premium subscribers, followed by North America (17 percent MAUs, 25 percent Premium), Latin America (21 percent MAUs, 23 percent Premium), and the Rest of the World (36 percent MAUs, 14 percent Premium).
Spotify said Premium ARPU declined 4 percent to €4.53.
Innovation and New Services
Spotify launched over 30 product updates during the fall, focusing on user experience and audio quality. Key launches included lossless audio for Premium users in more than 50 markets, offering high-quality 24-bit/44.1 kHz FLAC streaming, and new playlist mixing tools that enable users to customize transitions and create more personalized playlists. The company also enhanced its free mobile tier and introduced new taste profile controls for better personalization.
In a significant move toward integrating AI, Spotify launched Spotify in ChatGPT, extending its strategy into the fast-growing agentic AI landscape. This integration allows users to receive personalized music and podcast recommendations directly within ChatGPT.
Strategic Partnerships and Advertising
Spotify expanded its digital advertising footprint through new DSP partnerships with Amazon and Yahoo, providing programmatic access to Spotify’s audio and video inventory at scale. Automated sales channels remained the largest contributor to advertising growth.
Strategy Overview
Spotify’s growth strategy continues to focus on expanding user engagement, enhancing the Premium experience through technology innovation, deepening AI integration, and strengthening monetization across advertising and subscriptions.
Baburajan Kizhakedath