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Additional Reading from MarketBeat.com 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 since recovered dramatically, rising nearly 700% through the Nov. 4 close. Gold has surged past $4,200 an ounce, up 45% in the last year, but Weiss Ratings analyst Sean Brodrick says the real opportunity is in a little-known strategy that has historically outpaced gold's rallies many times over — including one past run where investors saw gains of more than 26,000%. Click here to see how this strategy works While still about 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-time Chief Executive Officer (CEO), Daniel Ek, is stepping down. Below, we'll dive into that leadership change and Spotify's latest earnings results, 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, succeeding Daniel Ek, who founded the company and has led it since 2006. Ek is difficult to replace—he effectively transformed the music industry. Apple (NASDAQ: AAPL), which now holds the second-largest share of the U.S. music streaming market, didn't launch Apple Music until 2015. By then, Spotify already had more than 70 million users, underscoring Ek's early lead and the company's first-mover advantage. Fortunately, Ek's departure isn't performance-related, and he will remain on the board as executive chairman, which should help limit disruption. Both Söderström and Norström have been with Spotify for more than 15 years, giving them deep institutional knowledge. Investors reacted cautiously to the announcement—shares fell about 4.2% on the day the news was released. The leadership change is worth watching, but with Ek staying involved and two long-tenured insiders taking over, it need not be a cause for alarm. Spotify Posts Huge EPS Beat, But Profitability Caveats and Guidance Weigh on Shares Spotify reported solid Q3 2025 results. Revenue totaled €4.53 billion (approx. $5.02 billion), up 7% and modestly ahead of estimates of €4.23 billion (approx. $4.86 billion). More notable was the company's diluted earnings per share (EPS): €3.34 (approx. $3.83), well above expectations of €1.96 (approx. $2.25). The outperformance reflected both gross- and operating-margin expansion—gross margin rose 53 basis points to 31.6%, about 50 basis points ahead of company guidance, while operating margin improved 220 basis points to 13.6%. There are important caveats, however. Management said much of the gross margin outperformance came from changes in estimates to "rights holder liabilities," a one-time accounting adjustment rather than an operational improvement. Also, roughly 40% of the operating-margin gain resulted from lower-than-expected "social charges" (taxes linked to the company's stock price). Because shares fell during the quarter, these charges declined, artificially boosting operating margin. In short, the profitability metrics looked impressive on paper but were partially influenced by non-recurring or accounting-driven items. Those factors inflated the EPS beat and tempered investor enthusiasm. Although Spotify added 3 million users, the company's Q4 guidance—€4.5 billion (approx. $5.17 billion)—came in lighter than expected, and shares slipped about 3.4% after the release. SPOT's Ad-Supported Opportunity Remains Compelling Despite its scale, Spotify's ad-supported tier remains under-monetized. About 63% of total users are on the ad-supported tier, yet it generated only 10% of Q3 revenue. Capturing more value from ad-supported users could be a major growth lever for the company. To that end, management is revamping Spotify's ad-supported monetization strategy and expects that segment to reach healthier growth rates in the second half of 2026. With shares well off their highs but several clear growth opportunities ahead, Spotify's outlook remains positive—though investors should monitor the leadership transition, one-time accounting items, and execution on ad monetization.
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