On its third quarter of 2026 earnings call, held on Oct. 22, 2026, Spotify (NYSE:SPOT) announced total revenue reached 5 billion euros, up 14% at constant currency. Free cash flow reached 3.2 billion euros over the past 12 months. Three takeaways from management stand out for long-term investors.
1. Proprietary Taste Models Drive Content Discovery and User Engagement
Investments in artificial intelligence are improving recommendation quality across the platform. Better recommendations keep subscribers engaged longer and strengthen long-term user retention.
Our taste model investments are already paying off. Early deployments show double-digit gains in content discovery, and our users are spending more time in select algorithmic sets.
— Christian Luiga, Chief Financial Officer
2. Global Audiobook Rollout Expands Subscriber Value and Platform Engagement
Catalog expansion beyond music increases daily platform usage among subscribers. Higher active days improve retention while creating new add-on revenue opportunities.
We have increased our audiobooks listenership by 40%. This is even before launching to the rest of the world. We have seen listening hours grow as well.
— Alex Norström, Co-Chief Executive Officer
3. Subscriber Base Scaling Shows Multiyear Growth Durability
Consistent annual additions demonstrate broad appeal across developed and emerging markets. A growing base creates a compounding foundation for recurring subscription revenue.
When we went public in 2018, we had 71 million subscribers. Since then, every single year, we’ve been adding 25 million subs or more. This year, we expect to reach 316 million subscribers.
— Alex Norström, Co-Chief Executive Officer
Looking Ahead
Revenue momentum accelerates across subscription and advertising channels, supported by lower operating expenses, or OpEx. The platform holds structural advantages in global distribution, proprietary listener taste data, and multi-format audio content, while focusing on margin expansion and capital return.
OpEx growth is now coming down meaningfully, and we expect that moderation to continue into 2027. We see that this year’s incremental OpEx is driving multiple benefits to our business.
— Christian Luiga, Chief Financial Officer
As monetization deepens through add-on features and pricing power, compounding cash flow supports organic investments and share buybacks.
We remain confident in our path and expect another year of progress toward delivering on our 2030 goals. We are well-positioned to continue compounding growth, profitability, and free cash flow.
— Christian Luiga, Chief Financial Officer
Read More: 3 Key Takeaways for Long-Term Investors
