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Today's Featured Article 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 plunging 66% in 2022, shares have climbed nearly 700% through the Nov. 4 close. For the everyday American who's worked hard to build their nest egg, Trump preserved a IRS loophole that allows you to protect your retirement savings before billions in American wealth are lost.
Download Your Free 2025 Wealth Protection Guide and execute the simple steps to protect your future. GET THE FREE GUIDE While still about 19% below its all-time high from June, recent developments—including a CEO transition and an earnings beat—could reshape the company's trajectory. The company recently announced that its long-time Chief Executive Officer (CEO), Daniel Ek, is stepping down. Below, we'll unpack that leadership change and the latest earnings results, and explain what they mean for investors. Spotify's Leadership Shakeup: From Visionary Founder to a Collaborative Approach On Jan. 1, 2026, Gustav Söderström and Alex Norström will become co-CEOs of Spotify, replacing Daniel Ek, who founded the company in 2006. Ek helped reshape the music industry by building Spotify into the leading streaming service. Apple (NASDAQ: AAPL) didn't launch Apple Music until 2015; by then Spotify already had more than 70 million users. That early lead illustrates Ek's role as an industry pioneer. Ek's departure is not performance-related, and he will remain on the board as executive chairman, which should help limit disruption. Both Söderström and Norström have spent more than 15 years at Spotify, giving them institutional knowledge of the business. Investors reacted cautiously to the announcement: shares fell about 4.2% on the day the news broke. The leadership change is worth monitoring, but given Ek's continued involvement and the experience of the incoming co-CEOs, it should not be cause for panic. Spotify Posts Big EPS Beat, but Profitability Caveats and Soft Guidance Weigh on Shares Spotify reported solid Q3 2025 results. Revenue was €4.53 billion (approximately $5.02 billion), up about 7% and modestly above consensus of €4.23 billion (approximately $4.86 billion). The headline metric was diluted earnings per share (EPS). Spotify delivered diluted EPS of €3.34 (about $3.83), significantly above the consensus of €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% (about 50 basis points above company guidance), and operating margin improved 220 basis points to 13.6%. There are important caveats, however. Management said much of the gross margin outperformance stemmed from changes in estimates to "rights holder liabilities," a one-time accounting adjustment rather than a clear sign of sustainable improvement. About 40% of the operating margin gain was driven by lower-than-expected "social charges" — payroll-related costs tied to share-based compensation and other employee expenses. Because Spotify's share price fell during the quarter, those charges decreased, which mechanically boosted the operating margin. Put together, these items inflated the EPS beat and temper the earnings surprise. Investors were also disappointed by guidance: Q4 revenue was guided to €4.5 billion (around $5.17 billion), lighter than many had expected. Despite adding 3 million users in the quarter, shares fell about 3.4% after the report. SPOT's Ad-Supported Opportunity Remains Compelling Despite its scale, Spotify's ad-supported tier is under‑monetized. About 63% of total users are on the ad-supported service, yet that cohort accounted for only roughly 10% of Q3 revenue. Improving monetization of ad-supported listeners could meaningfully boost revenue without the churn risks associated with price hikes for premium subscribers. Management is actively revamping Spotify's ad-supported monetization strategy and expects this segment to reach a healthier growth rate in the second half of 2026, which could be a sizable long-term tailwind if executed well. With the stock well off its highs and several meaningful opportunities ahead, Spotify's outlook remains constructive, although investors should weigh the one-time accounting factors and near-term guidance when assessing the company.
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