In this article, Spotify shares surged by 10% on Tuesday following the music streaming company’s announcement of its first full year of profitability, concluding the fiscal year with 1.14 billion euros in net income.
The fourth-quarter earnings report revealed the following figures in comparison to analyst projections: The Luxembourg-based company experienced a 40% year-over-year growth in gross profit, increasing by 10% from the previous quarter. Operating income stood at 477 million euros, slightly below the anticipated guidance.
Spotify disclosed that it disbursed a record $10 billion in royalties to the music industry in 2024, a trend likely to persist due to the company’s new multiyear publishing agreement with Universal Music Group unveiled in January. This agreement will introduce new paid subscription tiers, content bundles, and a direct license between the two entities for Spotify in the U.S. and other nations.
Spotify Wrapped remained a significant driver of user engagement throughout the year, with the annual December listening analysis contributing to year-over-year growth. The company reported a fourth-quarter record of 35 million net growth in Monthly Active Users (MAUs), marking a 5% increase since the previous quarter and a 12% rise for the year.
In the fourth quarter, Spotify reported a net income of 367 million euros, equivalent to $1.81 per share, an improvement from the previous quarter and a substantial increase from the net loss of 70 million euros, or 36 cents per share, in the same quarter of the previous year. Revenue for the fourth quarter reached 4.24 billion euros, surpassing the 3.67 billion euros from the corresponding quarter a year earlier.
For the first quarter, the company’s guidance anticipates 678 million MAUs, with a net addition of 3 million, of which two-thirds are projected to be premium paid subscribers. Total revenue is forecasted at 4.2 billion euros, exceeding the expectations of analysts surveyed by LSEG, who had estimated revenue at 4.17 billion euros.
Year to date, Spotify stock has risen by over 20%.
