Spotify Forecasts Fourth-Quarter Profit Above Estimates as AI Features Expand

Spotify expects fourth-quarter operating income of €820 million, slightly above analyst estimates, as it invests in AI-powered discovery and playlist tools.

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Oct 23, 2026 - 12:19

Oct 23, 2026 - 12:39

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Spotify Forecasts Fourth-Quarter Profit Above Estimates as AI Features Expand

Close-up of the Spotify app icon on a device screen (file photo). Photo: Matteo Della Torre / NurPhoto via Getty Images. Source: https://lifehacker.com/tech/spotify-and-claude-are-down

Spotify Sets Above-Estimate Profit Outlook as AI Drives Product Push

Spotify forecast fourth-quarter operating income of €820 million, ahead of the €813.4 million average analyst estimate compiled by LSEG. The Swedish music-streaming company is betting that artificial-intelligence features can improve discovery and engagement during the important holiday period.

AI tools are part of the growth strategy

Spotify’s current AI features include AI DJ, which creates personalized mixes with spoken commentary, and prompt-based playlists that let listeners describe a mood or preference. The company is using those tools to make the service more useful while facing competition from music-generation products such as Suno and Udio.

Co-chief executive Alex Norstrom said the company was investing where it saw a path to growth and that costs were moderating. Spotify also recently announced a licensing deal with distributor Believe for a paid tool focused on fan-made AI covers and remixes. It has signed related licensing agreements with Universal Music Group, Merlin and Kobalt.

Revenue and user outlook

Spotify reported third-quarter revenue of €4.97 billion, just below the €4.98 billion estimate. Earnings per share were €2.48 against an expected €2.80. Operating income reached €672 million, broadly in line with the €671.8 million analyst estimate compiled by Visible Alpha.

The company expects 818 million monthly active users in the fourth quarter, marginally below the 819 million estimate. It projects an increase of about 10 million premium subscribers to 316 million, above the 314.7 million expectation. Monthly active users rose 1% sequentially in the third quarter to 788 million.

Investor focus

Spotify shares rose nearly 4% in premarket trading after the outlook. Investors are watching whether AI-led personalization can support user growth without overwhelming the cost discipline that has helped the company improve profitability.

Illustrative file photo of headphones; not a Spotify product. Photo: C D-X / Unsplash. Unsplash License; cropped to 16:9. Image source; license.