Spotify beats paid user estimates as AI personalization strategy ramps up

Spotify on Thursday beat investor estimates on paid user growth for the third quarter, thanks in part to new AI-driven personalization features and other benefits designed to bolster the value of a subscription. Why it matters: Paid user growth is contributing to a more financially stable and profitable company that can reward shareholders while allowing Spotify to invest more in its business. State of play: Co-CEO Alex Norström told Axios on Thursday that the company's growing cash flow allows it to pursue more organic investment opportunities while returning excess capital to shareholders.Spotify returned excess cash to shareholders through stock buybacks in the third quarter, a commitment it made during its investor day May. Previously, the company used most of its cash flow for share buybacks to offset dilution from employee stock compensation, CFO Christian Luiga said. By the numbers: Spotify added 6 million premium subscribers last quarter, about 1 million ahead of guidance and Wall Street expectations. The paid user base of 306 million was up 9% from a year ago.Premium subscriber revenue rose 17% year over year, thanks to subscriber growth and price increases.Free, ad-suppo…

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