Shares of the music streaming giant soared Tuesday, with Spotify surges 16% after reporting strong user growth and better-than-expected earnings, as investors cheered another quarter of expanding subscribers and solid financial performance. The stock was on pace for its biggest single-day gain since 2019.
The Swedish company posted results that comfortably beat Wall Street expectations, driven by a sharp rise in users and continued improvements across its platform.
Earnings Beat Expectations
Here’s how Spotify performed compared with LSEG estimates:
Earnings per share: 4.43 euros vs. 2.74 euros expected
Revenue: 4.53 billion euros vs. 4.52 billion euros expected
Fourth-quarter revenue increased 7% from a year earlier, reflecting steady demand across global markets.
Net income climbed to 1.17 billion euros ($1.39 billion), or 4.43 euros per share, compared with 367 million euros, or 1.76 euros per share, during the same period last year. The sharp jump in profitability underscored Spotify’s improving cost structure and growing scale.
User Growth Accelerates
Monthly active users (MAUs) rose 11% year over year to 751 million, exceeding the 744.7 million analysts had forecast, according to FactSet. Paid subscribers also grew strongly, up 10% from a year earlier to 290 million.
The company said much of the growth came from Latin America, Europe, and other international regions, along with enhancements to its mobile free tier. Co-CEO Alex Norström noted that Spotify recorded its highest-ever quarterly net additions of users.
Ad-supported listeners reached 476 million, beating the 468.9 million projected by StreetAccount, highlighting continued strength in Spotify’s advertising-supported model.
Expanding Features and Global Reach
During the quarter, Spotify expanded its audiobook offerings into additional markets and introduced music videos for premium subscribers. The company also rolled out new artificial intelligence-powered tools aimed at improving personalization and discovery.
In addition, Spotify increased Premium subscription prices in the United States, Estonia, and Latvia. The company had previously raised prices in the U.S. in both 2023 and 2024.
The annual “Spotify Wrapped” campaign — which showcases users’ top songs and listening habits — was the most successful in the platform’s history. More than 300 million users engaged with the feature, generating over 630 million shares across social media, according to the company.
Outlook for the Coming Quarter
Looking ahead, Spotify expects to add another 8 million monthly active users in the current quarter, bringing the total to 759 million — above the 752.4 million forecast from FactSet. Premium subscribers are projected to rise to 293 million.
The company anticipates revenue of 4.5 billion euros for the quarter. However, it warned of a 670-basis-point year-over-year foreign exchange headwind. The revenue outlook fell slightly short of analysts’ expectations of 4.58 billion euros.
Even so, the latest results signal strong momentum for the streaming leader, as user growth, pricing power, and product innovation continue to drive investor confidence.
