Music streaming giant Spotify (NYSE:SPOT) reported that its fourth-quarter results exceeded expectations and provided upbeat guidance. Shares soared over 10% on the news.
The company posted revenue of €4.24 billion, surpassing analyst estimates of €4.14 billion and marking a 16% increase year on year. However, adjusted earnings per share missed the consensus forecast of €2.03, coming in at €1.76.
Spotify’s monthly active users grew 12% year on year to 675 million, and paid subscribers increased 11% to 262 million. The company’s gross margin climbed significantly, rising 555 basis points year on year to 32.2%.
Spotify provided solid guidance for the first quarter of 2025, forecasting revenue of €4.2 billion. It anticipates adding approximately 3 million net new monthly active users and 2 million net new subscribers in Q1.
“I am very excited about 2025 and feel really good about where we are as both a product and as a business,” said Daniel Ek, Spotify Founder & CEO. “We will continue to place bets that will drive long term impact, increasing our speed while maintaining the levels of efficiency we achieved last year.”
The company ended the quarter with a strong liquidity position, reporting €7.5 billion in cash, cash equivalents, restricted cash, and short-term investments.
Analysts responded positively, with Wolfe Research stating, “Spotify’s 1Q financial outlook points to upside vs. consensus revenue, gross profit & OI, but softer MAUs & net adds (though implies higher overall 1Q subs of 265M vs. 263M cons. due to the 4Q beat & in-line MAUs of 678M).”
Meanwhile, Barclays (LSE:BARC) analysts said it was “another good quarter” for the streaming company. “Spotify reported better-than-expected numbers across all KPIs,” the bank wrote. “Spotify MAUs came in much better than our estimates, showing 35mm net new MAU vs. 3Q, more than any prior 4Q in the company’s history. Subscribers net adds also beat our estimate by 3mm and reached a record level since 2020.”