Spotify Technology SA (NYSE:SPOT) shares surged following the company’s release of fourth quarter 2025 earnings that topped Wall Street expectations.
The Swedish music streaming giant reported reported revenue of €4.5 billion, up 13% year-over-year on a constant currency basis and above the consensus estimate of €4.8 billion.
Adjusted earnings per share came in at €4.43, exceeding the consensus of €2.85 by 63%.
Gross margin improved 83 basis points year-over-year to 33.1%, while operating income reached €701 million, representing a 15.5% operating margin.
Free cash flow for the quarter totaled €834 million, bringing full-year 2025 free cash flow to €2.9 billion.
Key user metrics also showed growth. Spotify’s monthly active users (MAUs) rose 11% year-over-year to 751 million, while premium subscribers increased 10% to 290 million. The company recorded its largest-ever net MAU additions in a single quarter, with 38 million new users.
During the quarter, Spotify continued to expand its offerings, including the rollout of music videos in select markets, the launch of audiobooks and the Spotify Partner Program in Nordic regions, and AI-powered personalization tools such as the Prompted Playlist beta for Premium users. Spotify also reported paying over $11 billion to music creators in 2025, its largest annual payout to date.
For Q1 2026, Spotify expects total revenue of €4.5 billion, 759 million monthly active users, 293 million premium subscribers, and operating income of €660 million.
“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,” Spotify co-CEO Alex Norström said in a statement. “It’s incredible to think that we now serve over three quarters of a billion people around the world.”
Spotify’s US-listed shares added 16% at about $481 on Tuesday morning.
