Spotify just closed a standout quarter, posting its biggest jump in users yet thanks to a powerful mix of its year-end Wrapped campaign and fresh upgrades to the free version of the app.
In the fourth quarter alone, Spotify added a record 38 million new users, bringing total monthly active users to 751 million. That’s an 11% increase compared with the same period a year ago. Paying subscribers also climbed, rising 10% to 290 million—showing that even as free listening grows, Spotify is still converting a large share of users into premium customers.
Wrapped remains one of Spotify’s most reliable growth engines, turning personal listening data into a viral, shareable moment. The company said Wrapped generated more than 300 million engaged users and sparked 630 million social media shares across 56 languages. That level of global reach doesn’t just boost brand awareness—it helps Spotify bring in new listeners who see friends posting their results and want to join in.
Financially, Spotify reported revenue of €4.53 billion ($5.39 billion), up about 7% year over year. Subscription revenue increased 8%, continuing to be the company’s main driver. Advertising, however, was softer: ad-supported revenue slipped 4% to €518 million ($616.6 million). Even with that dip, Spotify posted a key win for investors—profitability momentum. Gross margin improved by 83 basis points to a record 33.1%, helped by stronger ad sales around podcasts and music.
The results land during a major leadership shift. New co-CEOs Gustav Söderström and Alex Norström are stepping in as co-founder Daniel Ek moves out of the top operating role. They’re inheriting a platform that has grown far beyond its original mission of music streaming.
Over the years, Spotify has steadily expanded into podcasts, audiobooks, and more interactive listening experiences. The app now includes video elements like music videos and video podcasts, along with social tools designed to keep people coming back—features such as sharing what you’re listening to and experimenting with group-based interaction. Spotify has also pushed deeper into the broader music ecosystem, adding options tied to live events, including concert discovery and ticketing, plus ways to explore the stories behind songs and artists.
AI is becoming a bigger part of how Spotify keeps listening personalized. The company has introduced tools like an AI DJ, AI-generated playlists, and controls that let users block specific tracks from being recommended—giving listeners more influence over what the algorithm serves up next.
Behind the scenes, Spotify has been working to improve profitability, including raising subscription prices in key markets such as the U.S. and Europe. At the same time, it’s making its free tier more competitive by improving basic usability—like letting free users search for and choose the songs they want to play—an important move as competition from rival music streaming services remains intense.
Looking ahead, Spotify expects momentum to continue. For the current quarter, the company forecasts 759 million monthly active users and 293 million paying subscribers, signaling confidence that both its free and premium strategies are working in tandem.
