The forecast marks the first quarterly outlook issued under co-CEOs Gustav Soderstrom and Alex Norstrom, who took over from founder Daniel Ek in January when he transitioned to executive chairman.
Profit Outlook Tops Estimates, Revenue Growth Slows Spotify forecast operating income of €660 million ($786.13 million) for the first quarter, slightly above analysts’ consensus of €652.3 million, according to LSEG data. However, the company’s revenue forecast of €4.5 billion was marginally below the estimate of €4.57 billion.
Fourth-quarter revenue rose 7% to €4.53 billion, matching analyst expectations, but the growth rate was the slowest since Spotify’s 2018 market listing.
User Growth and Price Increases Drive Momentum Spotify expects 759 million monthly active users (MAUs) in the first quarter, exceeding the consensus estimate of 753 million. Premium subscribers are forecast to increase by 3 million to 293 million, slightly below expectations.
In the fourth quarter, premium subscribers rose 10% to 290 million, just under the forecast of 290.9 million. MAUs grew by 38 million to 751 million, surpassing estimates.
The company’s improved profit outlook follows price increases in multiple markets. Spotify raised its monthly Premium subscription price by $1 to $12.99 in the U.S., Estonia and Latvia earlier this year, after implementing similar hikes in more than 150 markets in 2025.
Cost Cuts Boost Margins Spotify’s gross profit climbed 10% year-on-year, aided by a 10% reduction in operating expenses. Gross profit margin increased to 33.1% from 31.6% in the previous quarter.
AI, Video Podcasts and Books as Competitive Strategy Spotify has been expanding beyond music streaming to defend its market position against rivals such as Apple and Amazon. The company recently launched an AI-powered playlist feature that can be created using a simple prompt, and has invested in video podcasts, including through a deal with Netflix. It has also broadened its content offerings beyond audiobooks to include physical books.
Despite the growth, Spotify noted that fewer new users are coming from Europe and North America, highlighting the importance of expansion in other regions.
The company’s stronger-than-expected profit forecast and rising user base reflect its ongoing efforts to balance revenue growth with cost control while navigating a competitive streaming landscape.