Spotify on Tuesday reported strong third-quarter results that topped Wall Street expectations and saw total revenue climb 12% year over year, but issued weak guidance for revenue and subscribers for the current quarter.

Shares of Spotify fell 2% on Tuesday.

Here’s what Spotify reported compared with LSEG estimates:

• Earnings per share: 3.28 euros vs. 1.97 euros expected.
• Revenue: 4.27 billion euros vs. 4.23 billion euros expected.

The streaming platform increased premium subscribers by 12% to 281 million, coming in just below StreetAccount expectations of 281.24 million.

Spotify hiked subscription prices in August to 11.99 euros from 10.99 euros in multiple markets, including South Asia, the Middle East, Africa, Europe, Latin America and the Asia-Pacific region.

“The business is healthy,” CEO Daniel Ek said in a release. “We’re shipping faster than ever. And we have the tools we need – pricing, product innovation, operational leverage, and eventually the ads turnaround – to deliver both revenue growth and profit expansion.”

Spotify announced in September that Ek will step down at the beginning of January and transition to the position of executive chairman. Longtime executives and co-presidents Gustav Söderström and Alex Norström are set to replace him.

The Swedish company forecasted fourth-quarter revenue of 4.5 billion euros, below the StreetAccount expectation of 4.56 billion euros. The streamer expects total premium subcribers to reach 289 million in the fourth quarter, short of the StreetAccount expectation for 291.1 million.

The streaming giant expects fourth-quarter operating income of 620 million euros and MAU of 745 million. Both were ahead of StreetAccount expectations of 610.2 million euros and 739.5 million MAU.

The company’s total monthly active users for the third quarter rose 11% to 713 million from the same period last year, surpassing its prior guidance and LSEG analysts’ expectations of 710 million.

Spotify attributed the growth to multiple enhancements in its mobile free tier added in September, including the ability to pick, play, and share any song. Free users previously had to listen to shuffled playlists with limited skips.

The company is also leaning into artificial intelligence, launching the service on ChatGPT in October. Users are now able to receive personalized music and podcast recommendations from the chatbot based on written prompts.

Later that month, Spotify also announced that it would partner with Sony Music Group, Universal Music Group, Warner Music Group, and other music agencies to develop AI products.

The company received backlash in June after Ek led a 600-million-euro funding round for defense technology startup Helsing, leading many musicians to remove their catalogs in protest.