Spotify Q4 2025: Record Users, Profit Surge

Spotify Q4 2025 Results: Record Users, Rising Margins and Strong Market Reaction

Spotify delivered one of the strongest quarters in its history in Q4 2025, combining record user growth, expanding profitability and a powerful stock market response. The results suggest that the company has successfully transitioned from a scale-focused streaming platform into a more mature, profit-generating subscription business.

Record Quarter: Users, Subscribers and Revenue

Spotify’s fourth quarter numbers reflect broad-based strength across its ecosystem.

• Monthly Active Users (MAUs): 751 million, up 11% year-on-year

• Net MAU additions: 38 million in a single quarter (record high)

• Premium subscribers: 290 million, up 10% year-on-year

• Net premium additions: 9 million, beating guidance by about 1 million

• Revenue: Approximately €4.5 billion, up 13% year-on-year in constant currency

Importantly, this was not just a volume-driven story. Spotify expanded its gross margin to 33.1%, an improvement of 83 basis points compared to the same quarter last year. Operating income reached €701 million, showing that the platform can now generate meaningful operating profit at scale.

Improved monetisation tools, disciplined cost control and better efficiency in podcasts and audiobooks contributed to the margin expansion.

Stock Reaction: Best Trading Day Since 2019

The market responded strongly. On 10 February 2026, Spotify’s stock surged between 14.8% and 15%, closing around $476 and marking its best trading day since 2019. Intraday gains reportedly reached as high as 19%.

Investors had entered the earnings announcement cautiously about whether subscription price increases and content investments would translate into sustainable profitability. The combination of record user growth, margin expansion and solid forward guidance triggered a sharp re-rating.

Analysts highlighted three key positives:

User Growth Beat Expectations

Ad-supported users reached approximately 476 million, ahead of market expectations of around 468.9 million.

Premium Subscriber Resilience

Despite price hikes, Spotify added 9 million net premium subscribers versus consensus expectations of 8 million, indicating limited churn pressure.

Strong Profit Signal

A 33.1% gross margin and €701 million operating income confirmed that prior investments are now contributing to earnings rather than just increasing expenses.

What Drove the Growth: Wrapped and International Expansion

Management attributed Q4’s exceptional performance partly to the success of its annual Spotify Wrapped campaign, which generated record engagement and user reactivation. Wrapped has evolved into a powerful marketing engine that encourages social sharing and boosts December activity.

Geographically, Spotify reported strong gains in Latin America, Europe and other international markets. Improvements in its mobile tier and broader smartphone adoption continue to expand the addressable audience.

The addition of 38 million net MAUs in one quarter counters concerns about saturation in mature markets and highlights the platform’s global growth runway.

2026 Outlook: Raising Ambition After a Reset Year

Co-CEO Alex Norström described 2026 as the “year of raising ambition” following a transition period in 2025 focused on restructuring and cost discipline. During that period, Spotify streamlined operations, reduced staff and tightened spending to strengthen the business model.

For Q1 2026, Spotify guides to:

• MAUs: 759 million

• Premium subscribers: 293 million

• Revenue: Approximately €4.5 billion

• Gross margin: 32.8%

• Operating income: Around €660 million

While guidance implies slower user additions compared to the Q4 record, it still reflects steady growth and sustained profitability, even as the company prepares another subscription price increase in the US.

Why This Quarter Matters for the Streaming Industry

Spotify’s Q4 2025 performance carries implications beyond the company itself.

For years, critics questioned whether music streaming could ever deliver sustainable margins given royalty structures and competitive intensity. This quarter demonstrates:

• Double-digit user and subscriber growth

• 13% revenue expansion

• Gross margins above 33%

• Significant operating income in a single quarter

The results suggest that the subscription streaming model can achieve both scale and profitability when combined with pricing power, operational discipline and diversified content offerings.

Conclusion

Spotify’s Q4 2025 earnings represent more than just a strong quarter. They signal a structural shift in the company’s business model. With record user additions, expanding margins and clear operating leverage, the market appears to recognise that Spotify has moved beyond growth-at-any-cost and into a sustainable profit phase.

The sharp post-earnings stock rally reflects not a one-off surprise, but a growing belief that Spotify’s long-term economics have fundamentally strengthened.