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Just For You Spotify Posts Huge EPS Beat: Shares Are Still Down Big From HighsWritten by Leo Miller. Published 11/5/2025. 
Key Points - Spotify is getting ready to introduce not one, but two new CEOs to replace the firm's pioneering founder.
- See why Spotify's massive EPS beat didn't lead shares to move higher.
- SPOT remains down nearly 20% from highs, and its ad-supported customer base provides a significant growth opportunity.
Spotify Technology (NYSE: SPOT) has long dominated music streaming, cementing its status as a top growth stock in digital entertainment. After tumbling 66% in 2022, shares have risen by nearly 700% through the Nov. 4, 2025 close. The same seven red flags that preceded the 1929 crash, '70s stagflation, and the 2008 meltdown are all flashing together right now — long before the headlines catch up. Our free Bellwether Signal Report breaks down each warning in plain language and explains why more Americans are shifting from vulnerable paper assets into hard assets like gold and silver IRAs. If you want to stay ahead of the next major market turn, now is the time to act. Claim your free Bellwether Signal Report before the next leg down While still about 19% below its all-time high in June 2025, recent developments—including a CEO transition and an earnings beat—could reshape the company's trajectory. The firm recently announced that its long-time Chief Executive Officer (CEO) Daniel Ek is stepping down. Below, we'll dive into that development as well as the latest earnings results at Spotify and explain what they mean for investors going forward. Spotify's Leadership Shakeup: From Visionary Founder to Collaborative Approach On Jan. 1, 2026, Gustav Söderström and Alex Norström will become co-CEOs of Spotify, replacing Daniel Ek, who founded the company and led it since 2006. It will be difficult to fill Ek's shoes. He helped revolutionize the music industry: Apple (NASDAQ: AAPL), which holds the second-largest share of the U.S. music streaming market, didn't launch Apple Music until 2015—by which time Spotify already had more than 70 million users. That early lead underscores Ek's role as a pioneer in streaming. Fortunately, Ek's departure isn't performance-related, and he will remain on the board as executive chairman. With Söderström and Norström each having spent more than 15 years at Spotify, the company should be positioned to navigate the transition with limited disruption. It's too early to know how the CEO change will affect Spotify long term. Investors reacted cautiously: shares fell about 4.2% the day the announcement was made. The leadership change is worth watching, but it should not necessarily alarm long-term investors. Spotify Posts Huge EPS Beat, But Profitability Caveats and Guidance Weigh on Shares Spotify reported solid Q3 2025 results. Revenue came in at €4.53 billion (approximately $5.02 billion), up 7% year over year, modestly above estimates of €4.23 billion (about $4.86 billion). More notable was the bottom line. Diluted EPS was €3.34 (about $3.83), well above the consensus €1.96 (about $2.25)—a beat of roughly €1.38 (about $1.58). The outperformance reflected expansion in gross and operating margins: gross margin rose 53 basis points to 31.6%, roughly 50 basis points ahead of company guidance, while operating margin improved 220 basis points to 13.6%. There are, however, important caveats. Management said much of the gross-margin outperformance was driven by changes in estimates to "rights holder liabilities," a one-time accounting adjustment rather than an indication of sustainable improvement. About 40% of the operating-margin gain stemmed from lower-than-expected "social charges," essentially payroll-related taxes that vary with the company's stock price; since shares declined during the quarter, those charges were lower. In short, the EPS beat was partly inflated by accounting and non-operational factors. Those items tempered investor enthusiasm. Although Spotify beat on user growth by 3 million, its Q4 guidance of €4.5 billion (about $5.17 billion) was lighter than expected, and the stock fell about 3.4% after the earnings release. SPOT's Ad-Supported Opportunity Remains Compelling Despite its market position, Spotify's ad-supported tier is under-monetized. About 63% of the total user base is on the free, ad-supported tier, yet that segment contributed only roughly 10% of total revenue in Q3. Monetizing ad-supported users more effectively would be a significant revenue opportunity for Spotify. To that end, management is revamping its ad-supported monetization strategy and expects this part of the business to reach a healthier growth rate in the second half of 2026. With shares well off their highs and meaningful opportunities ahead, Spotify's outlook still appears constructive for investors who can look past near-term accounting-driven volatility.
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