Spotify Technology SA reported an increase in monthly active users and paying subscribers in the third quarter of 2026, although its revenue came in slightly below market expectations.
The music streaming giant recorded 788 million monthly active users in the quarter ending September, marking a 1% increase from the previous quarter. The number of paying subscribers rose 2% to 306 million. While total user numbers matched analysts’ expectations, paid subscriptions fell slightly short of market estimates, according to Bloomberg consensus data.
Spotify’s total revenue reached €4.97 billion ($5.58 billion), up 16% compared with the same period last year. However, the figure was marginally below Wall Street’s forecast of €4.98 billion.
Advertising revenue also remained a challenge for the company. The segment generated €482 million ($541.42 million), falling short of analysts’ estimates of €484.8 million. Despite its substantial user base, Spotify has struggled to expand advertising revenue significantly, particularly given the large number of users who access its platform through the free service.
The company is looking to diversify its revenue streams through investments in audiobooks and podcasts. During the quarter, Spotify announced plans to expand its audiobook services into additional markets, including Spain, Mexico and Norway. The company believes audiobooks can generate additional revenue, particularly from premium subscribers willing to pay for more listening hours.
Its podcast business is also evolving, with a greater focus on established and popular shows. Spotify renewed its deal with Joe Rogan, allowing the company to sell advertising on his highly rated podcast in the United States. It also has a partnership with comedian Amy Poehler and an agreement with Netflix to distribute selected shows on the streaming platform.
Spotify reported a gross margin of 33% for the third quarter, in line with analysts’ expectations.
The company is also preparing to introduce an artificial intelligence-powered remixing tool that will allow users to customise songs. Spotify has been signing agreements with record labels and music publishers to support the development of the feature. However, competition from startups developing similar AI-powered music tools remains a concern.
Looking ahead, Spotify forecast revenue of €5.2 billion ($5.84 billion) for the fourth quarter of 2026. It also expects monthly active users to reach 818 million. Both projections were broadly in line with analysts’ estimates.
The latest results highlight Spotify’s continued user growth while underscoring the challenges it faces in meeting revenue expectations and strengthening its advertising business.
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