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Today's Bonus 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 rebounded nearly 700% through the Nov. 4 close. Discover the 10 Best AI Stocks to Buy Now!
The AI revolution is reshaping the investment landscape, and knowing where to place your bets is crucial. Our free report reveals the 10 top AI stocks that should be on your radar right now. Don't miss your chance to get in on these high-potential tech plays. Download your free report today. 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 firm recently announced that its longtime Chief Executive Officer (CEO), Daniel Ek, is stepping down. Below, we’ll review that leadership change and Spotify’s latest earnings results, and discuss what they mean for investors going forward. Spotify’s Leadership Shakeup: From Founder-Led 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 and has led it since 2006. Ek is a difficult leader to replace. He helped transform the music industry: Apple didn’t launch Apple Music until 2015, by which time Spotify already had more than 70 million users. That early lead illustrates how Ek positioned Spotify ahead of the streaming curve. Importantly, Ek’s departure isn’t performance-related. He will remain on the board as executive chairman, and both Söderström and Norström have been with Spotify for more than 15 years, giving them deep institutional knowledge as they assume the top roles. Investors reacted cautiously: shares fell about 4.2% on the day the news broke. The leadership change is worth watching, but with Ek staying involved and two long-tenured executives taking over, it need not be a cause for panic. Spotify Posts Large EPS Beat, but Accounting Items and Guidance Temper the Reaction Spotify reported solid Q3 2025 results. Revenue was €4.53 billion (approximately $5.02 billion), up 7% year over year, modestly ahead of the consensus of €4.23 billion (about $4.86 billion). Where the report stood out was diluted earnings per share (EPS). Diluted EPS came in at €3.34 (about $3.83), well above the consensus of €1.96 (about $2.25) — a beat of €1.38 (about $1.58). The upside was driven in part by margin expansion: gross margin rose 53 basis points to 31.6% (about 50 basis points better than guidance), and operating margin improved 220 basis points to 13.6%. But there are important caveats. Management said much of the gross-margin outperformance reflected changes to estimates for "rights holder liabilities" — a one-time accounting adjustment rather than a recurring improvement in royalties or revenue recognition. In addition, roughly 40% of the operating-margin increase stemmed from lower-than-expected "social charges" — costs tied to payroll and share-based compensation that fell as the company’s share price declined during the quarter. In short, the EPS beat was partly boosted by accounting and nonrecurring items, so the underlying operational improvement is somewhat less dramatic than the headline numbers imply. Those factors dampened investor enthusiasm. Despite adding 3 million monthly active users, Spotify’s Q4 guidance of roughly €4.5 billion (about $5.17 billion) was lighter than many expected, and the stock fell about 3.4% after the release. SPOT’s Ad-Supported Opportunity Remains Compelling Spotify’s ad-supported tier is still under-monetized. About 63% of users are on the free, ad-supported plan, but that cohort generated only roughly 10% of Q3 revenue. Monetizing those users more effectively would represent a significant revenue opportunity. Management is revamping Spotify's ad-supported monetization strategy and expects that segment to reach healthier growth in the second half of 2026. Although shares remain below their highs, the combination of a clearer path to better monetization, improving margins (adjusted for one-offs), and experienced internal successors to Ek leaves Spotify with a constructive outlook for investors who are focused on long-term opportunity rather than short-term volatility.
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