Spotify (SPOT) Stock Forecast & Price Target

Spotify Technology demonstrates a robust financial outlook, with premium subscribers increasing by 5 million to reach 281 million, aligning with company guidance, while total monthly active users surged by 17 million to 713 million, surpassing expectations. The firm reported a 28% year-over-year increase in operating profit to €582 million, significantly exceeding guidance, attributed to enhanced revenue growth outpacing content costs and stable royalty rates. Furthermore, a gross margin of 31.6% surpassed guidance by 50 basis points, indicating effective cost management and pricing strategies that support ongoing profitability.

Spotify Technology's guidance for the fourth quarter of 2025 indicates a shortfall in expected advertising revenues, contributing to a more cautious financial outlook. The ad revenue growth has stagnated, with a noted deceleration in average revenue per user (ARPU) and a reported 5.5% drop in advertising revenue, which fell significantly short of previous estimates. Additionally, concerns about potentially declining profit margins, increased content costs, and heightened competition pose considerable risks to Spotify's financial performance moving forward.