Spotify reports revenue growth and user increases in third quarter

Spotify Technology reported third-quarter revenue of nearly €5 billion, representing a 16% year-over-year increase. The company saw growth in its user base, with monthly active users (MAU) rising 11% to 788 million and premium subscribers increasing 9% to 306 million.

While total revenue grew, the company's advertising segment showed a significant shift in how revenue is generated. Ad-supported revenue reached €482 million, a 10% increase as reported. However, automated and biddable sales channels added €91 million year-over-year, while direct ad sales fell by €53 million due to fewer music impressions being sold through that channel.

Despite a decline in attributable net income to €518 million from €899 million in the previous year, Spotify's stock rose following the report. The company achieved a record gross margin of 33.0% and reported operating income of €672 million, slightly exceeding guidance.