Stock posts biggest gain in years on earnings beat
Spotify shares jumped 15% after the music streaming company delivered stronger-than-expected results and reported robust user growth across multiple regions. The move marked the stock’s best single-day performance since 2019, reflecting renewed investor confidence in the platform’s scale and monetization strategy.
The rally followed the release of quarterly results that exceeded expectations on profitability and narrowly topped revenue forecasts.
Results exceed market expectations
The company reported earnings of 4.43 euros per share, well above consensus estimates, as net income rose sharply from a year earlier. Revenue reached 4.53 billion euros, broadly in line with forecasts, representing a 7% year-on-year increase.
Profitability improved significantly, supported by operating leverage and continued growth in the subscriber base.
User base expands across regions
Monthly active users climbed 11% from a year earlier to 751 million, surpassing analyst expectations. Paid subscribers rose 10% to 290 million, while ad-supported users reached 476 million, also exceeding projections.
Management attributed the strong additions to expansion in Latin America, Europe, and other international markets, as well as enhancements to the mobile free tier. The company said it recorded the highest net user additions ever in a single quarter.
New features drive engagement
Spotify continued to broaden its offering during the quarter, launching audiobooks in additional markets and introducing music videos for premium users. The platform also expanded the use of artificial intelligence tools designed to improve discovery and personalization.
Engagement remained strong around the year-end “Spotify Wrapped” feature, which saw record participation and widespread social media sharing.
Pricing actions support revenue strategy
The company increased subscription prices for premium users in select markets, including the United States and parts of Europe, following previous price hikes in recent years. These moves form part of a broader effort to balance growth with improved margins.
Outlook points to continued user momentum
Looking ahead, Spotify expects monthly active users to rise to 759 million in the current quarter, with premium subscribers projected to reach 293 million. Revenue is forecast at around 4.5 billion euros, though management flagged a notable headwind from currency movements.
Despite the foreign exchange impact, the guidance suggests continued expansion of Spotify’s global footprint as the company invests in features and pricing to sustain long-term growth.
