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Spotify forecasts third-quarter operating income below estimates as AI music rollout advances

Spotify forecasts third-quarter operating income below estimates as AI music rollout advances

The company topped 300 million premium subscribers and outlined a phased AI music launch with Merlin, but softer Q3 guidance, slower user growth and heavier spending weighed on shares.

Fact Check
The core claims are corroborated by Reuters and Yahoo Finance: Q3 operating income guidance (€670M) came in below analyst estimates (~€677.8M); Q2 operating income (€655M) beat estimates; Spotify reached 300 million premium subscribers; and Q3 MAU guidance (788M) was below the ~793.5M estimate, pressuring the outlook. The one element not clearly supported is the specific '~5% lower before the bell' stock move—Reuters reported shares up 0.5% and Yahoo cited a 1.7% intraday gain, so the magnitude and direction of the premarket reaction stated in the claim conflicts with these later-in-the-day reports. Because all substantive financial and subscriber facts check out and only the precise stock-move detail is unverified, the claim is assessed as likely true.
    Reference: 123
Summary

Spotify said third-quarter operating income is expected to reach 670 million euros, below analysts' estimate of 677.8 million euros, and projected monthly active users of 788 million versus expectations of 793 million. The company said it does not need agreements with every major label before launching its AI music service and plans to begin with a public research preview. Second-quarter revenue rose 14% to 4.78 billion euros ($5.554 billion), net income reached 545 million euros, gross margin hit a record 33.4% and operating income came in at 655 million euros, above market expectations of 639.2 million euros. Spotify crossed 300 million paid subscribers for the first time after adding 7 million premium users, while monthly active users rose 12% to 777 million. Operating expenses increased 19% to 941 million euros as the company stepped up marketing and AI spending, and shares closed down 1.57% after the report.

Terms & Concepts
  • monthly active users: The number of unique users who used Spotify in a month, a key measure of platform reach and growth.
  • public research preview: An early release used to test a product and gather feedback before a broader launch decision.
  • Merlin: A global digital music licensing partner representing independent labels and artists.