Spotify hits first-ever annual profit, stock surges 13% to record high
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After 16 years of streaming, Spotify (SPOT) has finally turned a profit, sending its stock soaring 13% to an all-time high of $621.77. Investors cheered the music giant’s cost-cutting measures, price hikes, and user growth, which fueled a €1.14 billion net income for the fiscal year.
Strong Revenue Growth, EPS Misses Expectations
Spotify’s Q4 revenue hit €4.24 billion, marking a 16% year-over-year increase, surpassing Wall Street’s €4.15 billion forecast. However, earnings per share (EPS) fell short, coming in at €1.76 vs. expectations of €1.99, reflecting higher-than-anticipated operational costs. Despite the EPS miss, investors focused on the bigger picture: sustained profitability and strong user engagement.
User Growth and Royalty Payments Hit New Highs
Spotify paid a record $10 billion in royalties to the music industry in 2024, a testament to its booming user base. Monthly active users surged to 675 million, exceeding expectations of 665 million, driven by 35 million new subscribers. The company credited its viral Spotify Wrapped campaign for boosting engagement and retention.
CEO Daniel Ek Sets an Upbeat Tone for 2025
Spotify’s leadership remains bullish on the future. CEO Daniel Ek emphasized the company’s commitment to efficiency and innovation, stating: “We will continue to place bets that will drive long-term impact, increasing our speed while maintaining the levels of efficiency we achieved last year.”
Market Outlook: Can Spotify Keep the Momentum?
With the stock already up 35% year-to-date, Spotify now boasts a $125 billion market cap. Investors will be watching whether the company can sustain profitability while continuing to scale its user base and diversify revenue streams. For now, SPOT remains a standout performer in the streaming sector, setting the tone for further growth in 2025.
Strong Revenue Growth, EPS Misses Expectations
Spotify’s Q4 revenue hit €4.24 billion, marking a 16% year-over-year increase, surpassing Wall Street’s €4.15 billion forecast. However, earnings per share (EPS) fell short, coming in at €1.76 vs. expectations of €1.99, reflecting higher-than-anticipated operational costs. Despite the EPS miss, investors focused on the bigger picture: sustained profitability and strong user engagement.
User Growth and Royalty Payments Hit New Highs
Spotify paid a record $10 billion in royalties to the music industry in 2024, a testament to its booming user base. Monthly active users surged to 675 million, exceeding expectations of 665 million, driven by 35 million new subscribers. The company credited its viral Spotify Wrapped campaign for boosting engagement and retention.
CEO Daniel Ek Sets an Upbeat Tone for 2025
Spotify’s leadership remains bullish on the future. CEO Daniel Ek emphasized the company’s commitment to efficiency and innovation, stating: “We will continue to place bets that will drive long-term impact, increasing our speed while maintaining the levels of efficiency we achieved last year.”
Market Outlook: Can Spotify Keep the Momentum?
With the stock already up 35% year-to-date, Spotify now boasts a $125 billion market cap. Investors will be watching whether the company can sustain profitability while continuing to scale its user base and diversify revenue streams. For now, SPOT remains a standout performer in the streaming sector, setting the tone for further growth in 2025.