Spotify stock rose sharply in early trading on Tuesday after the company reported stronger profit and faster user growth for the fourth quarter of 2025. The move followed results that beat analyst expectations on earnings per share and showed continued momentum in paid subscriptions.
The updates landed as fourth-quarter reporting moves past the midpoint. FactSet said 59% of S&P 500 companies had reported as of February 6, with blended earnings growth at 13.0% for Q4 2025, up from 8.3% at the end of the quarter.
Spotify reported €4.531 billion in total revenue for Q4 2025, up 7% year-over-year. The company also posted a 33.1% gross margin.
Operating income reached €701 million, which equaled a 15.5% operating margin for the quarter. Spotify recorded €1,174 million in net income attributable to owners of the parent, and it reported €4.43 in diluted earnings per share.
Free cash flow totaled €834 million in Q4, and trailing twelve-month free cash flow reached €2.9 billion. Spotify also noted that social charges came in below its forecast during the quarter, which supported operating results.
Spotify ended Q4 with 751 million monthly active users (MAUs), up 11% from a year earlier. The company said it added 38 million net new MAUs in the quarter, which it described as a record for Q4.
Premium subscribers rose to 290 million, up 10% year over year, with 9 million net additions in Q4. Ad-supported MAUs reached 476 million, up 12% from the prior year, which kept the funnel for future subscription growth in focus.
Spotify linked engagement to major platform moments and feature updates during the period. The company said its annual Wrapped campaign engaged more than 300 million users globally.
For Q1 2026, Spotify forecast €4.5 billion in revenue. The company also guided to 759 million total MAUs and 293 million total premium subscribers, implying net additions of about 8 million MAUs and 3 million subscribers.
Spotify guided to a 32.8% gross margin and €660 million in operating income for Q1. It also flagged a foreign-exchange headwind of about 670 basis points to year-over-year growth, based on rates at the Q4 close.
In its shareholder update, Spotify said it felt “well positioned to deliver growth and improving margins” as it invests for long-term goals. Investors will now track whether Spotify sustains margin gains while expanding premium features and regional reach.
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