Good day,
Thank you for subscribing to the Earnings360 newsletter, your daily source for quarterly earnings news and updates.
Each morning edition contains a wrap-up of today's pre-market earnings announcements and yesterday's earnings announcements after the closing bell.
Before we send you your first edition, please take a moment to confirm your subscription below. We will not be able to send your newsletter until you confirm your subscription.
Confirm Your Subscription Here
The Earnings360 Team
Wednesday's Bonus News 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 falling 66% in 2022, shares have climbed nearly 700% through the Nov. 4 close. Often, investors will overlook stocks just because they're cheap.
It's a common thought that a cheap price tag means that something must be wrong with the company.
But this couldn't be further from the case in many instances. Get your FREE look at these THREE companies right here. While still 19% below its June all-time high, recent developments—including a CEO transition and an earnings beat—could reshape the company's trajectory. The firm recently announced that its long-term Chief Executive Officer (CEO), Daniel Ek, is stepping down. Below, we'll examine that leadership change and the company's latest earnings results, and 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, succeeding Daniel Ek, who founded the company and led it since 2006. Ek helped revolutionize the music industry and put Spotify far ahead of competitors. For context, Apple (NASDAQ: AAPL) 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. Importantly, Ek's departure isn't performance-driven. He will remain on the board as executive chairman, which should help preserve continuity. Both Söderström and Norström have been with Spotify for over 15 years and bring deep institutional knowledge of the product, content and commercial sides of the business. Investors reacted cautiously to the announcement, with shares sliding about 4.2% the day it was made. The leadership change is worth monitoring, but with Ek staying involved and two experienced insiders stepping into the CEO roles, it does not necessarily signal trouble. Spotify Posts Huge EPS Beat, But Profitability Caveats and Guidance Weigh on Shares Spotify reported solid Q3 2025 results. Revenue was €4.53 billion (approx. $5.02 billion), up about 7% and modestly above consensus of €4.23 billion (approx. $4.86 billion). More striking, diluted earnings per share (EPS) came in at €3.34 (approx. $3.83), well above the consensus estimate of €1.96 (approx. $2.25). The upside was driven in part by expansion in gross and operating margins. Gross margin rose 53 basis points to 31.6%—about 50 basis points ahead of company guidance—while operating margin improved roughly 220 basis points to 13.6%. There are important caveats, however. Management said part of the gross-margin outperformance reflected an adjustment to estimates for "rights holder liabilities," a one-time accounting change rather than an ongoing improvement in operating economics. About 40% of the operating-margin gain resulted from lower-than-expected "social charges," which are costs linked to stock-based compensation valuations and fluctuate with the company's share price. Because Spotify's shares declined during the quarter, those charges were lower, artificially boosting margin. Those factors helped inflate the EPS beat and tempered investor enthusiasm. Although Spotify added 3 million users, its Q4 guidance—€4.5 billion (approx. $5.17 billion)—came in lighter than some investors expected, and shares fell about 3.4% after the release. SPOT's Ad-Supported Opportunity Remains Compelling Spotify's ad-supported tier represents a significant upside. Roughly 63% of its total user base is on the ad-supported plan, yet that tier generated only about 10% of total revenue in Q3. Improving monetization of ad-supported users could materially increase ARPU and overall revenue. Management is revamping the ad-supported monetization strategy and expects this segment to reach healthier growth rates in the second half of 2026. With shares well below recent highs and meaningful opportunities to expand monetization, Spotify's outlook remains constructive, though investors should watch the accounting-related margin items and the company's forward guidance closely.
| 
