Spotify Reports Strong User Growth and Earnings Beat
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 28 2026
0mins
Should l Buy SPOT?
Source: CNBC
Spotify's stock fell 5.01% as it crossed below the 20-day SMA, despite positive market conditions with the Nasdaq-100 and S&P 500 both up.
The company reported a significant increase in monthly active users, reaching 751 million in Q4 2025, surpassing estimates. Additionally, Spotify's earnings per share of €4.43 exceeded expectations of €2.74, with revenue slightly above forecasts at €4.53 billion. This strong performance, particularly in ad-supported users, indicates robust demand and market leadership.
Despite the stock's decline, the strong user growth and financial performance suggest a solid foundation for future growth, with expectations of reaching 759 million users in 2025.
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Analyst Views on SPOT
Wall Street analysts forecast SPOT stock price to rise
21 Analyst Rating
15 Buy
6 Hold
0 Sell
Moderate Buy
Current: 462.820
Low
525.00
Averages
750.79
High
900.00
Current: 462.820
Low
525.00
Averages
750.79
High
900.00
About SPOT
Spotify Technology SA a Luxembourg-based company, which offers digital music-streaming services. The Company enables users to discover new releases, which includes the latest singles and albums; playlists, which includes ready-made playlists put together by music fans and experts, and over millions of songs so that users can play their favorites, discover new tracks and build a personalized collection. Its users can either select Spotify Free, which includes only shuffle play or Spotify Premium, which encompasses a range of features, such as shuffle play, advertisement free, unlimited skips, listen offline, play any track and audio. The Company operates through a number of subsidiaries, including Spotify LTD and is present in over 20 countries. Its service offers a music listening experience without commercial breaks.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Rapid Growth in Video Podcasts: Spotify's investment in video podcasts has led to the addition of over 530,000 video podcasts, with consumption soaring by 90% since the launch of a new partner program, which not only boosts user engagement but also opens new revenue streams for the company.
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- Significant User Growth: Spotify ended 2025 with 751 million monthly active users, an 11% increase year-over-year, with 476 million free users and 290 million paying subscribers, showcasing its strong capabilities in user conversion and retention, further solidifying its market leadership.
- Surge in Revenue and Profit: Spotify's total revenue reached $20.4 billion, with premium subscribers accounting for 89% of this revenue, while annual net income soared by 94% year-over-year to $2.6 billion, indicating substantial progress in profitability and sustainable growth.
- Leading Technological Innovation: In 2025, Spotify introduced over 50 new features, including the AI-powered Prompted Playlist tool, which enhances user control over content, expected to increase user engagement on the platform, thereby generating more revenue for creators and artists.
- Rapid Growth in Video Podcasts: Spotify's investment in video podcasts has led to the addition of over 530,000 video podcasts, with consumption soaring by 90% since the launch of a new partner program, which not only boosts user engagement but also opens new revenue streams for the company.
See More
Consumer Spending Fuels Rise of Innovative Giants
- Amazon Market Dominance: Amazon accounts for approximately 40% of U.S. online retail sales, and despite this being less than one-fifth of total retail spending, its Prime subscription service with over 200 million members and unmatched supply chain make it an ideal long-term investment.
- Netflix Industry Pioneer: With around 325 million paid subscribers, Netflix is poised for future innovation and monetization through its pending $82.7 billion acquisition of Warner Bros. and related brands, which is expected to provide a decade-long runway for growth and solidify its leadership in streaming.
- Shopify E-commerce Empowerment: Shopify supports over 5 million merchants with online store solutions, achieving $123.8 billion in gross merchandise volume in Q4 2022, and tripling its total volume since 2020, showcasing its strong appeal and stickiness in the global e-commerce market.
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See More
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- Portfolio Restructuring: Billionaire hedge fund manager Daniel Loeb reshuffled his Third Point LLC portfolio in Q4 2025, adding several new consumer and international investments, indicating a pursuit of market diversification.
- Reduced Mega-Cap Exposure: In the latest Form 13F filing, Loeb trimmed stakes in select mega-cap and semiconductor names, reflecting a cautious stance towards these sectors, possibly due to concerns over market volatility.
- New Buy Highlights: Among the new acquisitions, Loeb focused on consumer goods and international markets, likely aiming to capture opportunities arising from global economic recovery and enhance the growth potential of his portfolio.
- Regulatory Transparency: Loeb's portfolio changes are disclosed through the 13F filing as required by the U.S. Securities and Exchange Commission, increasing transparency for the hedge fund and helping investors better understand its investment strategies and market outlook.
See More
Daniel Loeb's Third Point Invests in Chipotle and Spotify Amid Market Struggles
- Chipotle Investment: Daniel Loeb's Third Point acquired a position worth over $174 million in Chipotle during Q4 2025, despite the stock's decline of over 5% in the last quarter, with analysts maintaining buy ratings and an estimated 18% upside potential.
- Spotify Position: Loeb invested $58 million in Spotify in the same quarter, which saw a drop of more than 16%, yet finished the year nearly 30% higher, indicating market confidence in its growth, with analysts suggesting a potential increase of over 42%.
- Union Pacific Stake Increase: Loeb also more than doubled his position in Union Pacific, raising its value to over $418 million, making it the fund's fifth-largest holding, reflecting a positive outlook on the railroad sector despite challenging market conditions.
- New and Reduced Positions: In addition to increasing stakes, Loeb established new positions in Constellation Energy and Alibaba while selling off shares in Flutter, Meta, and Talen Energy, demonstrating a strategic adjustment of his portfolio amid market volatility.
See More
Earnings Analysis of Spotify, Datadog, and Ferrari
- Spotify User Growth: Spotify added 29 million paid subscribers this quarter, with Monthly Active Users (MAU) growing 11% year-over-year, demonstrating its appeal in a competitive market; despite a 4% decline in ad revenue, its operating margin exceeding 15% indicates significant progress in profitability.
- Datadog Financial Performance: Datadog reported nearly 30% year-over-year sales growth in Q4, and despite facing AI competition pressures, management emphasized that AI-driven innovations will help attract more complex customers, suggesting resilience in its business model amid current challenges and potential for higher future charges.
- Ferrari Market Reaction: After experiencing a record stock price drop, Ferrari's Q4 earnings revealed strong performance, with shares rising about 10%, and management reaffirmed that its order book extends into 2027, indicating sustained brand appeal and pricing power in the luxury market.
- Industry Outlook: Despite concerns about AI disruption in the software sector, analysts believe that strong management teams and innovation capabilities will enable Spotify, Datadog, and Ferrari to maintain competitive advantages in the evolving consumer demand and technological landscape.
See More
Spotify's Price Increases Boost Financials Amid Market Trends
- Spotify's Pricing Strategy: Spotify has raised subscription prices twice in the U.S. over the past 18 months, achieving a record gross margin of 33.1% in Q4, exceeding analyst expectations, indicating that users are willing to pay more for quality content, thereby enhancing the company's profitability.
- User Growth and Profitability Shift: Spotify's premium subscribers grew by 10% year-over-year, with free cash flow reaching $3 billion for the entire year, demonstrating a shift from rapid growth to intelligent monetization strategies, improving overall financial health.
- Retail Sales Data Analysis: Retail sales increased by 2.4% year-over-year in 2025, falling short of the 2.7% analyst estimate, highlighting a disparity in consumer spending power, with the top 20% of earners accounting for 60% of personal outlays, while lower-income households face greater economic pressure.
- Unity Earnings Reaction: Unity's latest earnings report showed revenue and adjusted EBITDA below market expectations, leading to a 30% drop in stock price, as the market fears potential disruption from AI, despite the company's strong cash flow position, reflecting uncertainty about the future.
See More
