Spotify expects profits to exceed Wall Street’s forecasts by the end of the year

The year, for the world’s leading music streaming platform, is expected to end on a stronger note than investors had anticipated. According to a statement released alongside its latest quarterly results, Spotify is forecasting a profit for the fourth quarter of 2026 that exceeds Wall Street estimates, against a backdrop of new AI-powered features. The Swedish tech company forecasts an operating profit of €820 million, compared with analysts’ average estimate of around €813.4 million.

Following this announcement, the shares of company rose by 11.1 per cent at the close of trading on Wall Street. The platform founded by Daniel Ek offers AI-powered features such as DJ Alex, a voice assistant that curates personalised music mixes and playlists based on prompts that allow users to describe a mood. Investors are closely monitoring Spotify’s moves in this area to fend off emerging rivals in the field of AI applied to music, such as Suno and Udio.

In the third quarter, the company reported an operating profit of 672 million euros, in line with analysts’ average estimate of 671.8 million euros. Spotify reported revenue of €4.97 billion for the period under review, compared with estimates of €4.98 billion. It has 788 million monthly active users.

“This has been a quarter in which we have delivered on our promises. We have built a solid business that continues to grow exponentially; we invest when we see a path to growth; our costs are coming under control; and we still have plenty of room for growth,” said co-CEO Alex Norstrom in a statement.

Spotify’s forecast for monthly active users, at 818 million for the fourth quarter, was slightly lower than Visible Alpha’s estimates of 819 million, whilst its forecast for an increase of 10 million premium subscribers, bringing the total to 316 million, was higher than the estimate of 314.7 million.