• Spotify's third-quarter results showed a 12% year-over-year revenue increase and a 12% growth in premium subscribers.
• The company implemented a subscription price hike in several regions, which had a minimal impact on subscriber retention.
• Despite a high valuation, Spotify's integration of AI and expansion of free cash flow strengthen its investment appeal.

Spotify Technology S.A. (NYSE:SPOT) is a leading music streaming service known for its vast library and personalized playlists. The company competes with other streaming giants like Apple Music and Amazon Music. On November 4, 2025, Goldman Sachs maintained a Neutral rating for SPOT, advising investors to hold their positions. At that time, SPOT was priced at $629.60.

Spotify's third-quarter results were impressive, with a 12% year-over-year revenue increase, surpassing Wall Street expectations. Premium subscribers grew by 12%, reaching 281 million, slightly below the forecast of 281.24 million. Despite a 2% decline in share price due to a mixed outlook, the company's performance remains strong.

The company raised subscription prices in several regions, including Europe and Asia-Pacific, from 10.99 euros to 11.99 euros. This price hike had minimal impact on subscriber retention, indicating inelastic demand. Premium revenue grew by 9%, or 13% when adjusted for constant currency, while ad-supported revenue fell by 6% to 446 million euros.

Spotify's integration of AI and expansion of free cash flow strengthen its investment appeal. The company anticipates diminishing foreign exchange headwinds, which could enhance reported growth next year. Despite challenges, CEO Daniel Ek remains confident in Spotify's health, emphasizing product innovation and user engagement.

Spotify's valuation is high, trading at a premium compared to sector averages. The stock's current price is $629.60, reflecting a 2.25% decrease. Over the past year, SPOT has fluctuated between $376.04 and $785. The company's market capitalization is approximately $128.19 billion, with a trading volume of 4.14 million shares.