Spotify (NYSE: SPOT) Stock Jumps on Subscriber Growth Despite Q3 Earnings Miss

By Alex Lavoie22 Oct, 15:05From Financial Modeling Prep

Key points

Spotify (NYSE: SPOT) reported third-quarter earnings of $2.85 per share and revenue of $4.97 billion, both falling short of analyst estimates.
Despite the financial misses, Spotify's stock price surged 10% to $579.00 driven by stronger-than-expected premium subscriber growth.
At the reported share price, Spotify traded at a trailing price-to-earnings ratio of 31.31 and a price-to-sales ratio of 5.76.

Spotify (NYSE: SPOT) operates a music and podcast streaming service that competes with Apple (NASDAQ: AAPL)Music and Amazon (NASDAQ: AMZN) Music. Spotify reported third-quarter earnings of $2.85 per share before the market opened on October 22, 2026, below the provided $3.18 estimate. Earnings per share measure profit divided by the number of shares.

Revenue was $4.97 billion, below the $5.64 billion estimate. Zacks Investment Research uses a different earnings benchmark: its $3.10 consensus estimate. As highlighted by Zacks Investment Research, earnings also fell from $3.83 per share a year earlier.

Despite the earnings and revenue misses, shares rose 10% to $579.00 after premium subscriber growth exceeded company guidance, as highlighted by 24/7 Wall St. The gain stood out against a weaker media sector. Paid subscriber growth matters because subscriptions provide a recurring source of revenue.

Spotify also forecast fourth-quarter profit above estimates, as highlighted by Reuters. The Reuters item links the outlook to AI investments but provides no profit figure, so it does not show how far the forecast exceeds expectations.

At the reported share price, Spotify’s trailing price-to-earnings ratio was 31.31, meaning investors paid 31.31 times its earnings over the past year. Its price-to-sales ratio was 5.76. Its current ratio of 2.11 indicates that short-term assets were more than twice its short-term liabilities.