Spotify stock pops on Q3 earnings, driven by premium subscriber growth and AI for personalized experiences

Spotify ( SPOT ) stock rose after reporting Q3 earnings, which showed premium subscribers growing by 9% year-over-year and AI a key part of its strategy moving forward.

The streaming giant posted revenue of nearly €5 billion euros (about $5.6 billion), roughly in line with expectations. Premium subscriptions and ad-supported drove results, up 17% and 10% respectively. Earnings per share came in below expectations at €2.48, less than the €2.80 expected. Gross margin came in at a record 33%, just above the 32.9% Wall Street expected.

"We are very pleased with our performance heading into year-end and view the business as well positioned to deliver improved growth and margins in 2026," the company said in the release.

Shares rose 5% in pre-market trading, a welcomed recovery after falling 6% so far this year.

Monthly active users were up 11% year-over-year to 788 million. For the fourth quarter, it expects to reach 818 million. Revenue is also expected to grow by about 15%.

During the quarter, the company focused on using artificial intelligence to create a more personalized experience, including a taste profile for US Premium users to give insight into their music style. It also launched integration with Meta's Muse.

"By connecting Muse to Spotify, listeners can ask their agent to play music, save songs to their Library, build personalized playlists, find new books, podcasts and more," the release said.

The company also plans to expand audiobooks from 22 markets to 180-plus by the end of the year.

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on X at @ BrookeDiPalma or email her at bdipalma@yahoofinance.com.