Spotify (SPOT) Stock Rallies 15% After Crushing Q4 Expectations

TLDR

• Spotify stock rallied 15% Tuesday after Q4 earnings reached 4.43 euros per share, far exceeding the 2.74 euro analyst consensus.
• The platform’s monthly active users climbed 11% to 751 million, surpassing Wall Street’s 744.7 million projection.
• Premium subscribers grew to 290 million despite recent subscription price increases in the U.S. and international markets.
• The 2025 Spotify Wrapped campaign achieved record engagement with 300 million users participating and 630 million social shares.
• First quarter revenue forecast of 4.5 billion euros came below analyst expectations of 4.58 billion due to currency headwinds.

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Spotify shares soared 15% Tuesday following a blockbuster fourth-quarter earnings report that beat analyst estimates across key metrics. The stock climbed to $489.72, recording the company’s best single-day performance on record.

The Swedish streaming giant reported earnings of 4.43 euros per share for Q4, nearly double the 2.74 euro consensus estimate. Revenue totaled 4.53 billion euros, edging past the 4.52 billion euro forecast.

The company’s user base expanded 11% year-over-year to 751 million monthly active users. That figure topped FactSet estimates of 744.7 million.

Spotify Technology S.A., SPOT

Premium subscribers reached 290 million, marking 10% annual growth. The expansion came despite Spotify implementing price increases across global markets throughout 2024 and into 2025.

Subscription Prices Rise Across Markets

Spotify boosted U.S. premium pricing to $12.99 monthly in January, up from $11.99. International markets saw similar increases in August 2025, with premium subscriptions rising to €11.99 from €10.99 across South Asia, the Middle East, Africa, Europe, and Latin America.

Co-CEO Alex Norström highlighted the quarter’s user additions as the highest ever recorded in a single period. Strong performance in Latin America and Europe drove growth, along with enhancements to the mobile free tier.

The platform’s ad-supported user count hit 476 million, exceeding StreetAccount’s 468.9 million estimate.

Net income surged to 1.17 billion euros from 367 million euros in the year-ago quarter. On a per-share basis, earnings jumped to 4.43 euros from 1.76 euros.

Content Strategy Expands Beyond Music

Spotify’s 2025 Wrapped campaign set new engagement records. The personalized year-end feature attracted over 300 million users and generated more than 630 million social media shares.

The company broadened its audiobook availability during Q4, launching in Denmark, Finland, Sweden, Monaco, and Iceland. Premium members receive 15 hours of monthly audiobook access as part of their subscription.

Spotify announced plans to enable physical book purchases through its app via Bookshop.org for U.S. and U.K. users this spring. The platform also introduced music videos for premium subscribers and expanded AI-powered features.

Norström said major publishers have recognized Spotify for attracting new audiobook listeners and generating double-digit category growth.

The company’s gross profit margin reached 33.1%, beating the 32.9% Wall Street forecast.

Looking ahead, Spotify projects monthly active users will grow to 759 million in Q1, above the 752.4 million FactSet estimate. Premium subscribers are expected to reach 293 million.

First quarter revenue guidance stands at 4.5 billion euros, falling short of the 4.58 billion euro analyst consensus. The company cited a 670 basis point foreign exchange headwind affecting revenue comparisons.

Spotify forecasts Q1 gross margin of 32.8%, higher than Wall Street’s 32.1% estimate. Before Tuesday’s surge, the stock had declined 21% over the trailing 12 months as investors questioned revenue growth sustainability.

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