Spotify (SPOT.N) is set to exceed Wall Street expectations for fourth-quarter profits, driven by robust user growth and the impact of recent price increases, the Swedish audio-streaming giant announced on Tuesday. This upcoming report will be the first earnings update since founder and CEO Daniel Ek revealed his plan to transition to executive chairman in January 2026.

Strong Q4 Performance Expected

Spotify projects fourth-quarter operating income of €620 million ($723.04 million), slightly surpassing analyst estimates of €618.6 million, according to LSEG-compiled data. The company also exceeded expectations for its third-quarter earnings, reflecting continued strength in its premium subscription base and innovative content strategies.

Price Hikes Fuel Revenue Growth

Over the past year, Spotify has implemented price increases in more than 150 markets, a move aimed at boosting profitability while leveraging its dominant position in the streaming sector. Despite higher subscription costs, the company remains confident in retaining users due to its extensive music library, personalized playlists, and expanding content offerings.

Daniel Ek emphasized that the company’s investment priorities continue to focus on top-line growth, acquiring users in emerging markets, and diversifying content to include more podcasts, videos, and audiobooks. “We think that there’s still a lot of room left for us to grow in our core business,” Ek said in an interview with Reuters.

Expanding Content Offerings

Spotify has been actively broadening its content ecosystem. It recently introduced a high-quality streaming option known as lossless audio and has tripled its audiobook catalog to 500,000 titles across 14 markets. This expansion has increased both audiobook listeners and consumption hours by more than a third, highlighting Spotify’s strategy to diversify revenue streams beyond music.

The platform has also doubled down on video content, offering nearly 500,000 video podcast shows to engage users with a richer multimedia experience.

User Growth Remains Strong

In the third quarter, Spotify’s premium subscribers grew 12% to 281 million. Monthly active user net additions totaled 17 million, bringing the total to 713 million, surpassing market expectations. The company forecasts an additional 8 million premium subscribers by year-end, slightly below analyst estimates of 290.9 million, as competition intensifies from rivals like Apple Music and Amazon Music.

Despite this, Spotify’s projected quarterly monthly active users of 745 million exceed estimates of 737.3 million. The company anticipates fourth-quarter revenue of €4.5 billion, closely matching estimates of €4.57 billion, after reporting a 7% increase in third-quarter revenue.

Stock Performance

Spotify shares have experienced volatility, trading slightly lower in morning sessions, but the stock has risen approximately 44% year-to-date, reflecting investor confidence in the company’s growth trajectory and pricing strategy.