Spotify Posts Double-Digit Q3 2025 User Growth — and Another Ad-Supported Revenue Slip — As Paid Subs Top 280 Million

Photo Credit: Eyestetix Studio

Spotify stock (NYSE: SPOT) slipped during early trading following the company’s Q3 2025 earnings release – including double-digit user growth, a return to profitability, and another ad-supported revenue dip.Spotify posted its third-quarter financials this morning, pointing to $4.91 billion/€4.27 billion in total revenue (up 7% YoY). As usual, paid subs kicked in the lion’s share of the sum ($4.40 billion/€3.83 billion, up 9% YoY), with the remaining $512 million/€446 million or so having derived from ad-supported listening.

Adverts revenue fell 6% YoY – a noteworthy decline in light of Spotify’s aggressive freemium buildout, an ongoing video embrace (“more than 390 million users have streamed a video podcast on Spotify,” up 54% YoY, per co-president Alex Norström) and the fact that the service added 73 million MAUs from Q3 2024 (up 11% YoY to 713 million in Q3 2025).

“We continue to see 2025 as a transition year for the ads business and expect growth to improve in the back half of 2026,” CFO Christian Luiga indicated. (Reiterating recent advertising deals with Amazon and Yahoo, Norström framed the category’s growth potential as a matter of when as opposed to if.)

In any event, the DSP also reported 281 million paid subs for Q3 2025, up 12% YoY and about 1.8% on a quarterly basis.By market, almost 60% of Spotify MAUs resided in Latin America (21%) and Rest of World (36%) as of Q3. Consequently, the shares of North America and Europe decreased slightly on the quarter to 17% and 26%, respectively.

Nevertheless, paid subs remained heavily concentrated outside Rest of World, referring to a 37% share for Europe, 25% for North America, a steadily increasing 23% for Latin America, and then 14% for Rest of World.

“Notably, we continue to take market share, even in our most competitive markets,” soon-to-be co-CEO Norström claimed. “We also saw steady retention rates following the rollout of our recent price increases across more than 150 markets.”

As mentioned, Spotify confirmed Q3 2025 operating income of $669 million/€582 million as well – a figure that’s expected to top $712 million/€620 million in the fourth quarter, when paid subs are forecasted to reach 289 million. (Q3 net income, for its part, came in at $1.03 billion/€899 million.)Solid Q4 profitability and subscriber expectations or not, also as mentioned, the market doesn’t appear to be especially hot on SPOT at present; shares were hovering around $630 apiece, down about 2%, at the time of writing. While nothing to scoff at, the price is certainly a far cry from the bullish $800 to $900 targets set by multiple analysts in the leadup to the earnings release.

The reality raises several interesting questions. Chief among them: If these purported experts are consistently putting out curiously enthusiastic pre-earnings assessments that fail to align with actual market movements, should their words carry less weight moving forward?

An in-depth answer is best saved for a different time. More immediately, the earnings call, though free of groundbreaking disclosures, delivered a couple takeaways. And perhaps the biggest of those takeaways was a relatively insightful update on U.S. publisher pacts in the wake of Spotify’s bundling craze.

“As you may have heard,” Norström said, “we’re about to conclude another renewal round with all of our partners. And this is a very significant moment for us. For the first time in our history, we’ve got new, modernized deals in place with all of the top-five U.S. publishers. And these are new structures. They’re true win-win deals that we built to address the core objective for both sides.

“And for our publishing partners, these agreements better recognize the value that songwriters create across our different offerings. For Spotify, to your specific question here, these deals secure broader video rights that we’ve long needed. This was a critical strategic objective for us because it unlocks our ability to innovate and launch more product and features that you’ve seen us rolling out,” he proceeded.