Spotify has reported a record surge in users, closing the last quarter with 751 million monthly active users, as its popular year-end “Wrapped” campaign and expanded free-tier features helped attract millions of new listeners.
The Swedish music streaming giant added 38 million users in the fourth quarter alone, pushing total monthly users up 11% year-on-year, according to its latest earnings update. Paid subscriptions also grew, with premium subscribers rising 10% to 290 million during the period.
“Wrapped” fuels engagement and social sharing
Spotify attributed much of the growth to its annual Wrapped campaign, which highlights users’ listening habits and trends from the year.
The company said over 300 million users engaged with Wrapped, generating 630 million shares across social media platforms in 56 languages, reinforcing Spotify’s dominance as a culturally relevant music platform.
Revenue grows, but ad business softens
Spotify posted €4.53 billion ($5.39 billion) in revenue, a 7% increase from the previous year. Subscription revenue rose by 8%, reflecting continued growth in paid users and recent price increases in major markets.
However, revenue from Spotify’s ad-supported tier declined by 4% to €518 million ($616.6 million), highlighting ongoing pressure in the digital advertising market.
Despite this, Spotify recorded a gross margin of 33.1%, its highest level ever, as improved ad sales for podcasts and music content helped boost profitability.
Leadership transition and platform expansion
The strong performance comes amid a leadership transition, with Gustav Söderström and Alex Norström stepping in as co-CEOs, succeeding co-founder Daniel Ek.
Under its evolving strategy, Spotify has expanded far beyond music streaming. The platform now includes podcasts, audiobooks, video podcasts, music videos, concert ticketing, and deeper storytelling features that give users insight into songs and artists.
Spotify has also invested heavily in social and discovery tools, including group listening features, sharing tools, and collaborative experiences aimed at improving user retention.
AI and personalization at the core of growth
Artificial intelligence has become a central pillar of Spotify’s product strategy. Features such as AI DJ, AI-generated playlists, and improved recommendation controls allow users to fine-tune what content appears in their feeds.
Users can now exclude tracks from recommendations, giving them more control over personalization and listening preferences.
Outlook
Looking ahead, Spotify expects to reach 759 million monthly users and 293 million paying subscribers in the current quarter, signaling continued momentum despite rising competition from platforms such as YouTube Music and Amazon Music.
As Spotify balances user growth, monetization, and profitability, its expanding ecosystem suggests the company is positioning itself not just as a streaming service, but as a broader digital audio and entertainment platform.
