Spotify beat earnings and revenue estimates last quarter amid strong growth in active users, sending shares up nearly 15%.
Earnings per share were EU€4.43, up from €1.76 one year ago and well above LSEG estimates of €2.74. Revenue was up 7% to €4.53 billion, beating estimates of €4.52 billion.
“We closed out what we dubbed as the Year of Accelerated Execution with another solid quarter, delivering a strong finish to 2025. In Q4, we met or exceeded guidance across all key metrics,” said Spotify co-CEO Alex Norström.
“Our job is to understand new technologies quickly and capture their potential, which we’ve done time and again. The entire industry stands to benefit from this [AI] paradigm shift but we believe those who embrace this change and move fast, will benefit the most,” said co-CEO Gustav Söderström. This is Soderström and Norström's first earnings report as CEOs after taking over from founder Daniel Ek in January.
Monthly active user numbers surged 11% to 751 million, beating FactSet estimates of 744.7 million. This was driven by growth across all regions, the company said, with particular outperformance in Latin America, Europe, and its Rest of World category.
Paid subscribers also rose 10% to 290 million. More than 300 million users engaged with its year-end Spotify Wrapped package.
Operating income grew 47% year-over-year to €701 million due to a decrease in social charges, Spotify said.
According to Spotify, it paid over US$11 billion to the music industry across 2025, its largest ever annual payment.
The company expects monthly active users to climb to 759 million in 2026’s first quarter, with 293 million premium subscribers. It has forecast revenue of €4.5 billion and €660 million in operating income.
Spotify’s (NYSE: SPOT) shares closed 14.8% higher at US$476.02, and increased a further 0.3% in after-hours trading. Its market capitalisation is $98.70 billion.
