Stockholm - Shares of music streaming platform Spotify rose sharply on Wednesday after the company reported record annual profits and strong subscriber growth for 2025.
The stock climbed about 6% at market opening before trimming some gains later in the session. The rise followed the release of the company’s fourth-quarter earnings report on Tuesday.
Spotify reported net profits of just over €2.2 billion for 2025, marking a 94% increase compared to the previous year. The result represents the company’s second consecutive profitable year and reinforces its financial turnaround after years of operating losses since its founding in 2006.
User growth also remained strong. Monthly active users increased 11% year-on-year, while paying subscribers rose 10%. By the end of 2025, the platform had reached 751 million monthly active users, driven in part by its largest quarterly increase on record.
The company said cost reductions and price adjustments in several markets contributed to a profit margin of 33.1%, the highest in its history.
For the first quarter of 2026, Spotify expects revenue of around €4.5 billion and projects monthly active users to reach 759 million.
Founder and executive chairman Daniel Ek, who stepped down as chief executive last month, said during the earnings call that the company has expanded beyond music into a broader audio platform connecting creators and audiences. New CEO Alex Norström said 2026 would focus on expanding ambitions following a year of operational progress.
Spotify’s growth also had a wider impact on the music industry. The company said it paid more than €11 billion to artists in 2025, describing it as the largest annual payout to creators by any platform. It also reported helping generate over $1 billion in ticket sales by linking users to live events.
Artificial intelligence remains a central focus for the company. Spotify has introduced AI-driven features such as a prompt-based playlist generator and a personalised digital DJ, which have been adopted by millions of subscribers.
However, executives acknowledged challenges linked to AI-generated music. Gustav Söderström, co-president and chief product officer, said the issue has expanded in scale, adding that Spotify is working with record labels and artists on clearer disclosure practices regarding production methods.
The company’s results underscore its shift from long-term losses to sustained profitability, as it seeks to balance growth, innovation and industry partnerships in a rapidly evolving digital media landscape.
