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Spotify is rolling out audiobooks to more than 180 markets globally, including new regions in the Middle East, Africa, and Asia. This expansion moves the service beyond its initial core markets like the US and UK, where it has been testing how to bundle books into its existing subscription plans.
This matters because audiobooks are a key part of the plan to make the business more profitable. While Spotify has to pay most of its music revenue back to record labels in royalties, it has more flexibility with books and podcasts. If the company can get more of its 675 million users to listen to books on the same app where they hear music, it can grow its sales without being as dependent on the expensive music catalogs it does not own.
Spotify is rolling out a feature called Taste Profile to US listeners, which lets people see and adjust the data the app uses to suggest new music. By giving users more control over what influences their Home feed, the company is trying to make its recommendations more accurate and useful. This matters because Spotify's main edge over rivals like Apple Music is its ability to keep people listening through personalized discovery. Better recommendations usually lead to people spending more time in the app, which helps the company keep its subscribers and sell more ads.
Spotify is putting more of its cash toward buying back its own shares. The board added 1.5 billion dollars to the existing plan, which now has about 2.2 billion dollars left to spend. A buyback is when a company uses its cash to buy its own stock from the market, which reduces the total number of shares and makes each remaining share worth a larger piece of the business.
This move shows that Spotify is confident in its ability to generate cash. For years, the company focused on growth and lost money, but it has recently turned into a profitable business. Using that profit to buy back shares suggests management believes the stock is a good value and that they have more cash than they need for day-to-day operations or new investments.
Source: Business Wire
Spotify is launching an AI persona label to clearly mark music created by artificial intelligence. The platform also plans to block these AI tracks from appearing on some of its official playlists. This move addresses a growing tension in the industry where low-quality or fake AI tracks can flood the service and siphon royalty payments away from human musicians.
For a long-term owner, this is a smart defensive move. By protecting the earnings of real artists and the major record labels that represent them, Spotify maintains its vital relationships with the people who provide its core content. It also helps preserve the quality of its recommendations, ensuring that its most popular playlists do not become cluttered with computer-generated filler.
The company reached 300 million paid subscribers for the first time, a 9 percent increase from last year. Total monthly users grew to 777 million, showing that the platform is still finding new listeners even as it raises prices. Revenue for the quarter rose 14 percent to about 4.8 billion euros, and gross margins, the percentage of revenue left after paying royalties to labels, expanded to 33.4 percent.
However, the stock fell about 5 percent because the company's profit outlook for the next quarter was lower than what analysts expected. While the business is becoming more efficient, growth is starting to slow in its most established markets like North America and Europe. For long-term owners, the focus remains on whether Spotify can keep expanding its margins by growing its advertising and podcast businesses faster than its music royalty costs.
Spotify has turned a corner after a choppy 2025, with management now consistently hitting higher profit targets as they shift focus from raw user growth to making more money from each listener.
| Expectation | |
|---|---|
| EPS | $3.19 |
| Revenue | $5.65B |