Is Spotify Technology SA a Buy After Its Latest Earnings Report?

SPOT rose nearly 4% after Q3 2026 results, even as net income fell to €580 million from €1 billion a year earlier and missed analyst estimates. Traders looked past the earnings miss and focused on operating strength.

Revenue hit €5 billion, up 16% year over year. Premium subscribers reached 306 million, a 9% increase. Gross margin printed at a record 33%, and free cash flow came in at €823 million. Management also delivered robust Q4 guidance, which appears to have carried the reaction.

The bottom-line miss stands out against those operating figures. Interpretation: the market treated the net income decline as secondary to margin expansion, cash generation, and forward guidance, rewarding the quality of the quarter over the headline earnings shortfall.

One analyst rates SPOT a buy despite a forward P/E of 52, citing its dominant market position and growth opportunities in audiobooks and AI-powered features. The multiple leaves little room for execution slips, since the valuation already prices in sustained growth.