- Company name
- Spotify
- Sector
- Audio streaming
- About
- Spotify runs an audio streaming service with users in many countries. Users listen to music, podcasts and audiobooks on a free tier with ads or on a paid Premium tier. In Q3 2026, it had 788 million monthly active users and 306 million Premium subscribers. Revenue was €4,969 million in the quarter, of which Premium gave €4,487 million and ads gave €482 million. It pays most of its revenue to record labels, music publishers and other rights holders. The company is based in Luxembourg and reports in euros under IFRS. Its Co-Chief Executive Officers are Alex Norström and Gustav Söderström, and it had 7,284 employees at the end of Q3 2026. The shares trade on the New York Stock Exchange.
- Thesis
- Spotify trades at a premium because investors pay for its scale and for profit margins that keep rising. The gross margin reached 33.0% in Q3 2026, up from 31.6% a year earlier, and free cash flow was €3.2 billion over the last 12 months. Premium subscribers grew 9% and Premium ARPU grew 7.5% at constant currency as price increases took effect. For the premium to be earned, three things must be true. Spotify must reach its Q4 2026 guidance of 316 million subscribers, €5.2 billion of revenue and operating income of €820 million. Margins must keep rising in 2027 while operating expenses, which grew 19% in Q3 2026 without currency effects and social charges, grow more slowly than revenue. Price increases must not raise churn, and deals with labels must keep music costs in line with revenue. The Q4 2026 report, expected in early February 2027, gives the next test and the first view of 2027. If growth slows or costs for AI, marketing and content rise faster than revenue, the premium can shrink within one to two years.
- Risks
- Spotify depends on licenses from a few large record labels and publishers. If they ask for higher royalties or limit access to music, gross margin can fall.
Apple, YouTube and Amazon offer similar music catalogs. If rivals cut prices or bundle music with other services, Spotify can lose subscribers or pricing power.
Operating expenses grew about 26% in Q3 2026, led by marketing and cloud and AI spending. If this spending does not bring growth, margins can stop rising.
Spotify reports in euros but earns in many currencies. Currency moves change reported growth; they added about 1.9 percentage points to revenue growth in Q3 2026.
The founders hold beneficiary certificates that give them strong voting power, so other shareholders have limited influence.
- Balance sheet
- Cash: €9.9B
Debt: €0.0M
Net cash: €9.9B
Spotify has no financial debt. At September 30, 2026, cash and cash equivalents were €6,032 million and short-term investments were €3,856 million; with restricted cash, the total was €9.9 billion. Long-term investments were €1,066 million. The Exchangeable Notes of €1,458 million at December 31, 2025 were no longer on the balance sheet at September 30, 2026. Lease liabilities were €391 million. Equity was €8,741 million. Free cash flow was €3.2 billion over the 12 months to September 30, 2026. The company bought back $1.1 billion of shares in 2026 through October 21, and in August 2026 the board raised the repurchase authorization to about $2.223 billion.
As of 2026-09-30.
- Checkpoints
- Feb 9, 2027 (estimate): Q4 2026 results and first view of 2027. Pending. Watch: 316 million subscribers or more, operating income of €820 million or more and a gross margin near 33.8% pass; a miss on subscribers or margin fails.
- Recent events
- 2026-10-22: Spotify reported Q3 2026 results. Revenue rose 16% to €4,969 million, or 14% at constant currency. Gross margin was 33.0% and operating income was €672 million. Monthly active users rose 11% to 788 million, and Premium subscribers rose 9% to 306 million. Free cash flow was €735 million. For Q4 2026, Spotify guided to 316 million subscribers, revenue of €5.2 billion and operating income of €820 million. It said that it had bought back $1.1 billion of shares in 2026 through October 21.
2026-08-20: Spotify's board increased the share repurchase program by $1.5 billion, to a total remaining authorization of about $2.223 billion.
2026-08-04: Spotify reported Q2 2026 results. Revenue rose 14% to €4,777 million, and operating income rose 61% to €655 million. Premium subscribers reached 300 million after 7 million net additions.
2026-04-28: Spotify reported Q1 2026 results. Revenue was €4,533 million, gross margin was 33.0% and operating income was €715 million. Premium subscribers reached 293 million.
2026-02-10: Spotify reported Q4 2025 results. It added a record 38 million monthly active users to reach 751 million, and Premium subscribers reached 290 million. Operating income was €701 million.