Spotify Q3 Preview: Will Price Hikes Strike the Right Note?

Spotify SPOT reports third-quarter 2025 results on November 4, before the market opens. Analysts expect 2.15 ($2.43) in earnings per share on roughly 4.3 billion ($4.9 billion) in revenue. The stock is up approximately 47% so far this year.

In the second quarter, Spotify generated 4.2 billion in revenue, a 10% increase from a year earlier. Premium subscribers reached 276 million, while monthly active users totaled 696 million. Gross margin improved to 31.5%, which management credited to cost control and efficiency gains tighter. The company has also been raising prices across several major markets to boost ARPU and profitability. That move should lift revenue per user this quarter, but it also introduces a new question about how subscribers will react to the higher prices. Whether they accept them or trim subscriptions, increasing churn.

The company is also preparing for a leadership transition. Daniel Ek plans to shift from CEO to Executive Chairman at the start of 2026, while Gustav Soderstrom and Alex Norstrom will step in as co-CEOs. The two have been part of Spotify's leadership for more than 14 years, so a smooth transition is expected. Even so, the market will listen for hints on how the pair plans to divide responsibilities and where they intend to take the

business next.

Beyond leadership and pricing, the focus will remain on advertising, podcast monetization, and free cash flow. The ad segment has been recovering, and investors will look for confirmation that AI-driven recommendations and tighter cost controls are supporting margins. With the stock trading around 48x forward earnings, the market will want to see clear evidence that higher pricing and disciplined spending are translating into sustainable margin expansion.