By Adam Clark

Spotify Technology was falling early on Tuesday. Investors looked to be taking profits from the stock's recent surge, even as earnings and user growth beat expectations.

Spotify reported a net income of 899 million euros ($1.03 billion) -- or EUR3.28 per share, up from EUR300 million, or EUR1.45 per share, a year earlier. Analysts were expecting a profit of roughly EUR1.96 a share for the third quarter this year, according to a FactSet survey. Revenue climbed 12% to EUR4.3 billion.

Spotify remains the dominant music streaming platform over rival services from Amazon.com, Apple, and France's Deezer.

It increased its monthly active users by 11% to 713 million, topping the company's prior guidance of 710 million. Premium subscribers rose by 12% to 281 million, in line with expectations.

Spotify announced price increases in August for premium subscribers in multiple markets across South Asia, the Middle East, Africa, Europe, Latin America, and the Asia-Pacific region. But this didn't seem to have much of a negative impact.

"We think this demonstrates the platform's continued global dominance in music streaming with impressive margin expansion, as gross margins reached 31.6%... exceeding guidance," wrote Kenneth Leon, research director at CFRA Research.

American depositary receipts of the Swedish company were down 3.5% in morning trading. The wider market was also falling: The S&P 500 lost 0.6%.

The ADRs have climbed 44% this year so far through to Monday's close but were hit at the end of September when founder Daniel Ek said he would step down as CEO of the music-streaming platform at the end of the year.

Spotify expects monthly active users to grow to 745 million and premium subscribers to reach 289 million by the end of the current quarter. Management has forecast quarterly revenue of EUR4.5 billion.

Write to Adam Clark at adam.clark@barrons.com

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November 04, 2025 10:17 ET (15:17 GMT)

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