The streaming giant beat expectations across the board, marking its first full year of profitability and proving that its aggressive investments in podcasts, AI recommendations, and exclusive content are starting to pay off.

• Monthly Active Users (MAUs): Up 12% YoY to 675 million.
• Premium Subscribers: Grew 11% YoY to 263 million.
• Total Revenue: Jumped 16% YoY to €4.2 billion.
• Gross Margin: Up 555 basis points to 32.2%.
• Operating Income: Hit €477 million, solidifying its profitability streak.

What’s Driving Spotify’s Success?

Spotify’s growth isn’t just about more subscribers—it’s about higher margins and smarter spending. Here’s why the company is finally making money after years of aggressive expansion:

1. Price Hikes Without Major Backlash

Spotify raised its subscription prices in 2023, and despite some initial complaints, users stuck around. This move directly boosted revenue without significant churn, proving Spotify’s pricing power.

2. Ad-Supported Revenue Growth

While premium subscribers still make up the bulk of revenue, Spotify’s advertising business is growing fast. More users mean more ad inventory, and Spotify has been improving targeted advertising, making it more valuable to brands.

3. Podcasting and Audiobooks Pay Off

Spotify spent billions locking down exclusive podcast deals and expanding into audiobooks, and now it’s finally seeing returns. Premium users get 20 hours of audiobook listening per month, keeping them engaged and less likely to cancel.

4. AI-Powered Personalization

From AI-generated playlists to smart recommendations, Spotify’s machine learning tools keep users listening longer—translating into higher engagement and better ad revenue.

Should You Buy Spotify Stock?

Spotify stock has been on a steady climb, up significantly from its 2022 lows. Investors who bought during the downturn are seeing major gains. But is it still a good buy?

✅ Reasons to Be Bullish:

• Sustained profitability for the first time.
• Expanding revenue streams beyond music.
• Strong user growth despite competition from Apple Music and YouTube Music.
• Better margins thanks to smarter cost management.

⚠️ Risks to Watch:

• Regulatory scrutiny over streaming royalties.
• Competition from Apple, YouTube, and TikTok Music.
• User churn if another price hike happens too soon.

Final Take

Spotify is no longer just a growth stock—it’s a profitable company with a real business model. The days of burning cash to expand are over, and with continued innovation in AI, advertising, and exclusive content, it’s shaping up to be a long-term winner in digital audio.

Investors betting on Spotify stock are no longer just hoping for growth—they’re seeing real returns.