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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 plunging 66% in 2022, shares have climbed nearly 700% through the Nov. 4 close. See the Signals Most Traders Miss
We monitor subtle shifts in order flow, volume patterns, and early trend behavior.
Stock News Trends highlights moves long before they hit mainstream screens. Join Free — Start Tracking Early Market Data While still about 19% below its all-time high from June, recent developments—including a CEO transition and an earnings beat—could shape the company's next chapter. The firm recently announced that its longtime Chief Executive Officer (CEO), Daniel Ek, is stepping down. Below, we'll dig into that leadership change and Spotify's latest earnings results, and what both mean for investors. 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's early move into streaming helped reshape the music industry. Apple (NASDAQ: AAPL) didn't introduce Apple Music until 2015, by which point Spotify already had more than 70 million users. That head start highlights 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. Investors reacted cautiously to the news—shares fell about 4.2% the day the announcement was made. The leadership change is worth watching, but with Ek staying involved and two experienced insiders taking over, it shouldn't be an immediate cause for alarm. 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 7% and modestly above estimates of €4.23 billion (approx. $4.86 billion). The headline was the upside in diluted earnings per share (EPS). Diluted EPS came in at €3.34 (approx. $3.83), beating expectations of €1.96 (approx. $2.25) — roughly a €1.38 (about $1.58) beat. The outperformance reflected expansion in both gross and operating margins. Gross margin rose 53 basis points to 31.6%, about 50 basis points ahead of guidance, while operating margin improved 220 basis points to 13.6%. There are important caveats, though. Management said much of the gross margin outperformance was due to changes in estimates to "rights holder liabilities," a one-time accounting adjustment rather than an operational improvement. About 40% of the operating margin increase came from lower-than-expected "social charges"—taxes tied to the company's stock-related obligations. Because shares declined during the quarter, those charges fell, which mechanically boosted operating margin. In short, the profitability beat was real but partially driven by accounting and timing effects. Those factors tempered investor enthusiasm. Even though Spotify added 3 million users, Q4 guidance of €4.5 billion (approx. $5.17 billion) came in lighter than expected, and shares fell about 3.4% after the release. SPOT's Ad-Supported Opportunity Remains Compelling Spotify's ad-supported tier is still under-monetized. Although roughly 63% of the user base is on the ad-supported plan, that segment generated only about 10% of total revenue in Q3. Better monetization of ad-supported users would be a major growth lever for the company. To that end, management is revamping its ad-supported monetization strategy and expects that this area will achieve healthy growth in the second half of 2026. With shares well off their highs and sizable opportunities ahead, Spotify's outlook remains constructive for investors who are comfortable with the competitive landscape and execution risks.
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