Spotify nearly doubled its year-on-year profits in the final quarter of 2025. The company marked only its second, yet consecutive, profitable year to date consolidating its positive trajectory.
Spotify stocks spiked 6% higher at market opening this Wednesday, later paring down some of its gains, after the company released its earnings report on Tuesday.
The popular music platform closed 2025 with a little over €2.2bn in net profits which represents a 94% increase, almost double what was achieved the year prior.
The positive result reinforced the historic turnaround the firm accomplished since 2024, when it became profitable on the year for the first time. Before then, Spotify operated at a loss for almost two decades after being founded in 2006.
Last year, the music streaming platform grew in users by 11% and in paying subscribers by 10%. Additionally, Spotify also cut costs and increased prices in several markets achieving a 33.1% profit margin, the highest in its history.
A substantial part of the success in 2025 occurred towards the end of the year, when the company hit a total of 751 million monthly active users (MAUs), after its biggest quarterly increase in activity.
For the first quarter of 2026, Spotify is projecting a continuation of this trajectory. The report points to around €4,5bn in revenue and 759 million MAUs.
The Swedish executive chairman and founder, Daniel Ek, who resigned from the CEO position last month, stated in the earnings call that Spotify has "built a platform for audio but increasingly to all other ways in which creators connect to the public".
The new CEO, Alex Norström, also declared that "after a year of execution, 2026 will be the year of elevating ambition".
Music industry and AI
The impact of Spotify's growth in 2025 was also felt outside the company, in the music industry as a whole.
The firm paid out more than €11bn to artists last year which the earnings report states is "the largest annual payment to music creators by any platform in history".
Moreover, the Swedish company stated that "we also helped artists generate over one billion dollars in ticket sales, connecting fans to live events".
Going forward, one of Spotify's biggest bets is on AI integration, as is the case for most tech companies.
The firm has accelerated the launch of tools such as a playlist generator based on prompts, and a personalised agentic DJ, which have already been used by millions of paying subscribers.
However, artificial intelligence is also presenting new problems for Spotify such as AI-generated music. In the earnings call, the co-CEO, Gustav Söderström, stated that "the issue isn't new but it has scaled".
Söderström added that the company is working closely with the music industry to allow artists and record labels to include disclaimers specifying the production methods.
