Spotify Surges to Record High on Subscriber Growth, First-Ever Annual Profit
Spotify Technology SA reported impressive Q4 results with higher-than-anticipated subscriber gains, contributing to its inaugural annual profit.
* Active monthly users climbed to 675 million, exceeding analyst expectations of 664.9 million.
* Premium subscribers grew by 11% to 263 million, also surpassing forecasts.
CEO Daniel Ek emphasized Spotify's expansion beyond music streaming into audiobooks, podcasts, and video, attracting paying subscribers despite price increases. Alongside job reductions of 1,500, these initiatives have propelled Spotify to its first full-year profit since its inception in 2008.
Spotify's 2024 net income reached €1.14 billion ($1.2 billion). Ek attributed the company's transformation to its initial focus on scale rather than profitability. He expressed confidence in its continued growth trajectory in 2025, coining it "the year of accelerated execution."
For Q1, Spotify projects a gain of 3 million monthly active users and 2 million premium subscribers. Revenue is estimated to increase to €4.2 billion, while gross margin is anticipated to reach 31.5%, driven by premium subscription growth.
Spotify's shares soared by 11%, hitting a record high of $606.95. The company recently launched a video-creator platform where contributors are compensated based on content consumption, intensifying its competition with YouTube in the video podcast market.
With over 300,000 video podcasts on its platform and a distribution agreement with Universal Music Group NV, Spotify remains bullish about its growth prospects. Ek highlighted the mutually beneficial nature of the deal, stating that Spotify's growth will also benefit its partners.