Spotify’s third quarter results show strong revenue growth and margin expansion. Premium subscriber base up 12% with 5 million net additions, while ad-supported users increase by 13 million. Gross and operating margins improved, with free cash flow up 15%. Fair value estimate raised to $490. Currency headwinds pose a growth threat, but US dollar shares provide a hedge. Fourth-quarter sales guidance slightly light due to currency headwinds. Sales growth driven by user base expansion, with potential for ARPU growth in 2026 through price increases, add-on services, and advertising revenue recovery.

Read more at Morningstar: Spotify Earnings: Continual March Up in Sales, Profits, and Users; Foreign Exchange a Near-Term Headwind