Oct 22 (Reuters) – Spotify forecast fourth-quarter profit above Wall Street estimates on Thursday, as the Swedish music streaming company bets on its AI-powered features to drive user growth in the crucial holiday season.
The company expects operating income of €820 million ($920.53 million), compared with analysts’ average estimate of €813.4 million, according to data compiled by LSEG.
Investors closely monitor the company’s profitability as it invests in AI for improving discovery and engagement on the platform to attract more users and fend off emerging music-generation rivals such as Suno and Udio.
In the third quarter, the company reported operating income of €672 million, in line with Visible Alpha-compiled analysts’ average estimate of €671.8 million.
Spotify reported revenue of €4.97 billion in the quarter, compared with estimates of €4.98 billion, according to LSEG data.
“This was a quarter where we did what we said. We’ve built a strong business that keeps compounding, we invest when we see a path for growth, our costs are moderating, and there is more runway ahead,” co-CEO Alex Norstrom said in a statement.
($1 = 0.8908 euros)
(Reporting by Jaspreet Singh in Bengaluru; Editing by Sriraj Kalluvila)
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