On Tuesday, Spotify Technology's (NYSE:SPOT) top leaders defended the company's pricing strategy after a blowout third quarter, saying value and engagement—not competitor pricing—drive how much users pay.
Spotify Smashes Expectations With Strong Q3 Results
Spotify posted third-quarter 2025 earnings that easily surpassed Wall Street forecasts, reporting earnings of $3.83 per share, well above the $1.87 consensus estimate. Revenue climbed 7% year over year to $4.99 billion, beating expectations of $4.92 billion.
The company's user base continued to surge, with monthly active users rising by 17 million to 713 million, exceeding Spotify's own projections by 14 million. Premium subscribers grew 12% to 281 million, showing broad-based strength across regions.
‘The Best Product Will Always Win,' Executives Say
During the earnings call, Spotify executives emphasized that pricing decisions are guided by the platform's value-to-price ratio, not by matching competitors.
"We pay attention to competition, but what we pay the most attention to is obviously our own offering," said Alex Norström, Spotify's chief business officer and co-president. "The important thing for us is just keep continuing to improve the value-to-price ratio, meaning raising value and relentlessly just build the best product out there. The best product will always win."
Gustav Söderström, co-president and chief product and technology officer, added that the company's strong user engagement and time spent on the platform each month give it confidence in its pricing strategy.
Daniel Ek: ‘Not Just A Music Service Anymore'
Spotify CEO Daniel Ek said that as the platform evolves beyond music, pricing must reflect its broader value. "In many markets … Spotify is not just a music service anymore. It's a music, podcast and audiobooks service," Ek noted.
He added that in regions where audiobooks haven't yet launched, prices remain adjusted to local dynamics—but the company's long-term goal is to align pricing with the full breadth of its audio ecosystem.
Price Action: Spotify shares closed down 2.25% at $629.60 on Tuesday and traded 1.02% lower after hours, according to Benzinga Pro.
According to Benzinga's Edge Stock Rankings, Spotify's stock shows a strong long-term price trend, though it is currently trending downward in the short and medium term. Click here for a detailed breakdown of how it compares with peers and competitors.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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