Spotify Stock Surges 11.7% as User Growth Smashes Records

Spotify Technology stock (SPOT) soared 11.7% in premarket trading on Tuesday, February 5, 2025, following the release of its fourth-quarter 2024 earnings report. The audio streaming giant reported record-breaking user growth, with monthly active users (MAUs) and premium subscribers both surpassing expectations.



Spotify added 35 million MAUs in the fourth quarter, the largest quarterly net addition in the company's history, bringing the total MAUs to 675 million. This represents a 12% year-over-year increase and a 5% quarter-over-quarter increase. The company also added 11 million premium subscribers, matching its previous record set in the holiday quarter of 2019, and bringing the total premium subscribers to 263 million. This represents an 11% year-over-year increase and a 4% quarter-over-quarter increase.



Spotify's strong user growth was driven by several factors, including successful marketing campaigns such as "Spotify Wrapped," which delivered record-high user engagement. The company also benefited from shifts in competitor dynamics, with rival streaming service TikTok Music shutting down in select markets. Additionally, Spotify's continuous innovation and diversification of content, including the introduction of video podcasts, have contributed to its user growth and market dominance.

Spotify's revenue also grew 16% year-over-year to €4.2 billion, driven by a 19% increase in premium revenue and a 7% increase in ad-supported revenue. The company reported a quarterly operating income of €477 million, reflecting lower personnel and related costs and marketing spend, partially offset by social charges. Spotify's first full year of operating income profitability was driven by its record-high operating income in the fourth quarter.

Spotify expects 678 million MAUs for the first quarter of 2025, up 3 million MAUs, with paid subscribers hitting 265 million. Operating income is expected to reach €548 million. The company's strategic focus on both premium subscriptions and ad-supported models has contributed to its overall revenue growth and market dominance, as it continues to attract and retain users while maintaining a steady revenue flow.

In conclusion, Spotify's record-breaking user growth and strong financial performance have driven its stock price to new highs. As the company continues to innovate and diversify its content offerings, it is well-positioned to maintain its market dominance and deliver value to shareholders in the long term.