Spotify Technology (NYSE:SPOT) shares jumped more than 14% in premarket trading on Tuesday after the music streaming company posted fourth-quarter results that comfortably topped Wall Street forecasts, supported by strong user additions and expanding profitability. The company reported earnings per share of €4.43, well above the consensus estimate of €2.85. Revenue rose to €4.53 billion, edging past expectations of €4.52 billion and marking a 7% year-over-year increase, or 13% growth on a constant-currency basis.
User momentum remained a key highlight during the quarter. Monthly active users climbed to 751 million, exceeding analyst projections of 745.24 million and reflecting 11% growth from a year earlier. Spotify added a record 38 million MAUs in the period, significantly ahead of its own guidance of 32 million.
“We are pleased with our performance heading into 2026 and view the business as well-positioned to deliver growth and improving margins,” the company said in its earnings release.
Premium subscribers increased 10% year over year to 290 million, with net additions of 9 million during the quarter. Profitability also continued to improve, with gross margin expanding to 33.1%, up 83 basis points from the prior year. Operating income surged 47% year over year to €701 million, translating into an operating margin of 15.5%.
Looking ahead, Spotify forecast first-quarter 2026 revenue of €4.5 billion, slightly below the consensus estimate of €4.57 billion. However, the company expects monthly active users to rise to 759 million, ahead of analyst expectations of 752.45 million.
“We paid out over $11 billion to the music industry in 2025 – the largest annual payment to music creators in history,” the company noted, underscoring its ongoing support for artists and creators.
Free cash flow for the quarter totaled €834 million, lifting full-year 2025 free cash flow to €2.9 billion. The results point to a strengthening financial position, even as currency headwinds reduced reported revenue growth by roughly 580 basis points.