Spotify shares surge 14% after streaming giant beats earnings forecasts
The music platform added more users than expected and nearly doubled its net income year-on-year
Spotify, the music streaming company, saw its shares jump 14.5% to $473.02 after reporting stronger-than-expected fourth-quarter earnings and user growth.
The Swedish company posted earnings of 4.43 euros per share, well ahead of the 2.74 euros forecast by analysts polled by LSEG, on revenue of 4.53 billion euros, a 7% increase year on year.
Monthly active users rose 11% from a year ago to 751 million, beating the 744.7 million expected by analysts polled by FactSet.
Paid subscribers grew 10% to 290 million, while ad-supported users reached 476 million, topping the 468.9 million estimated by StreetAccount.
Co-chief executive Alex Norström said the company recorded the most users ever added during a single quarter, with strong growth in Latin America, Europe and the rest of the world.
Net income nearly tripled to 1.17 billion euros from 367 million euros in the same period a year earlier.
Spotify attributed part of its growth to improvements to its free mobile tier, the launch of audiobooks in new markets and the rollout of music videos and artificial intelligence tools for premium users.
The company said its annual "Spotify Wrapped" feature, which summarises listeners' habits at year end, was its most successful ever, with more than 300 million users interacting with it and over 630 million shares on social media.
Spotify has also recently raised prices for premium users in the United States, Estonia and Latvia, following similar increases in 2024 and 2023.
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Looking ahead, the company forecast monthly active users of 759 million for the current quarter, above a FactSet estimate of 752.4 million, and projected premium subscribers would reach 293 million.
However, its first-quarter revenue guidance of 4.5 billion euros fell short of the 4.58 billion euros expected by analysts, with Spotify flagging a 670 basis point headwind from foreign exchange rates.
The Recap
- Spotify released fourth-quarter 2025 financial results and Q&A webcast.
- Webcast scheduled for 8:00 a.m. Eastern Time, Slido code provided.
- Christian Luiga to present at Morgan Stanley conference on 13 November.
