Spotify rockets past 640 million users, on track to achieve first full year of profitability

Spotify continues to lead the streaming music industry

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In brief: Spotify is one step closer to realizing its first full year of profitability. In the company's recently released third quarter earnings report, Spotify said total revenue increased 19 percent year over year to €4 billion ($4.24 billion). Operating income reached €454 million and gross margin hit 31.1 percent – both record highs.

Subscriber numbers were impressive as well. The streaming music giant finished the quarter with 640 million monthly active users, an increase of 11 percent compared to the same period a year ago. Better yet, premium (paid) subscribers grew 12 percent to 252 million users. For comparison, Spotify had 626 million monthly active users and 246 paying members at the end of the second quarter.

Founder and CEO Daniel Ek said Spotify has never been in a stronger position, adding that they are where they set out to be – if not a little further – and on track to achieving their long-term goals. " I am very excited about what lies ahead for us," the executive added.

Investors are backing Spotify's vision as well. Stock in the company is up more than nine percent on the day, nearly 15 percent over the past five days, and 142 percent year to date. As of writing, shares are trading at $456.01 apiece.

Spotify continues to experiment with features to attract new users and keep existing members engaged. AI playlists, which are rolling out now in the US and Canada, uses generative AI to build curated playlists. The streaming giant is also bringing music videos to more markets – now up to 97 – and expanding daylists to additional languages (14+).

Not every decision Spotify has made as of late has been popular with its user base. Earlier this year, the company announced plans to shut down its Car Thing streaming device in December. Following heavy criticism, Spotify eventually agreed to refund buyers but still plans to brick the gadget. Not willing to give up, some have turned to custom firmware to keep the auto accessory alive.

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_{Image credit: Sourabh Jhajharia, Felipe Pelaquim}