Spotify posts profit, grows premium subscribers

The streaming platform added 11 million net subscribers in Q4, a 4% increase from the 252 million reported in the previous quarter. Spotify stated that this growth exceeded its projections by 3 million subscribers. Over the full year, the company gained 27 million net paying subscribers, up from 236 million at the end of 2023.

Spotify also recorded a significant financial milestone, reporting an operating income of €477 million ($509.48 million) in Q4, contributing to its first full-year operating profit of €1.4 billion ($1.495 billion).

Spotify founder and CEO Daniel Ek expressed optimism about the company’s trajectory, stating, “I am very excited about 2025 and feel really good about where we are as both a product and as a business.” He emphasised the company’s focus on long-term strategic investments and efficiency.

The company’s total Monthly Active Users (MAUs) grew 12% year-over-year to 675 million in Q4, reflecting a quarterly increase of 35 million users. This growth surpassed Spotify’s projections by 10 million MAUs. The company attributed this expansion to strong performance across all regions, particularly in its “Rest of World” and Latin America segments.

Spotify noted that shifting competitive dynamics in certain developing markets contributed to both MAU and Premium subscriber growth. The company highlighted the 28 November shutdown of rival streaming service TikTok Music in Indonesia, Brazil, Australia, Singapore, and Mexico as a potential factor.

Financially, Spotify’s Premium revenue reached €3.705 billion (about $3.957 billion) in Q4, a 19% increase year-over-year at constant currency. This growth was driven by an 11% rise in subscribers and a 7% increase in Average Revenue Per User (ARPU) to €4.85.

The company’s advertising-supported revenue totalled €537 million for the quarter, reflecting a 6% year-over-year increase. Spotify attributed this growth to increased impressions sold across both music and podcast advertising, though it noted pricing softness as a limiting factor.

Geographically, Spotify reported subscriber growth in all regions. The “Rest of World” segment accounted for 14% of Premium subscribers, while North America and Europe made up 26% and 37%, respectively. These figures represented slight declines from the previous year when North America and Europe accounted for 27% and 38% of Premium subscribers, respectively.

The company’s Gross Margin finished at 32.2% in Q4. Spotify also reported that its operating income, though reaching a record high, was €4 million below guidance.

As of the end of 2024, Spotify’s global workforce consisted of 7 261 full-time employees. The company cited reduced personnel costs and lower marketing expenses as contributing factors to its overall profitability.