• Spotify Technology S.A. has reported its fourth-quarter and full-year 2025 results, with quarterly revenue rising to €4.53 billion and net income to €1.17 billion, alongside record user engagement including 751 million monthly active users and 290 million premium subscribers.
• Beyond the strong headline figures, Spotify combined record profitability and a record 38 million quarterly user additions with ongoing share buybacks and new earnings guidance that points to continued focus on margin discipline and monetization.
• We’ll now examine how this combination of record user additions, higher margins, and refreshed guidance interacts with Spotify’s existing investment narrative.

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Spotify Technology Investment Narrative Recap

To own Spotify, you need to believe it can turn a huge user base into steadily improving profits without losing momentum to rivals or regulation. Right now, the key short term catalyst is how effectively Spotify converts its record 751 million monthly active users and 290 million premium subscribers into higher margins. The biggest risk remains whether content and licensing costs, along with competition and regulatory limits on data use, cap that margin progress. This quarter’s results strengthen, rather than change, that core debate.

Among recent moves, Spotify’s Q1 2026 guidance looks especially relevant: it is targeting about €4.5 billion in revenue and €660 million in operating income despite a sizeable currency headwind. Paired with ongoing share buybacks and high engagement features like Wrapped and AI playlists, this guidance reinforces the idea that management is prioritizing margin discipline and monetization, which directly relates to whether the user growth story can sustain earnings over time.

Yet for all the optimism, investors should be aware that rising content and licensing costs could still...

Spotify Technology's narrative projects €23.8 billion revenue and €3.4 billion earnings by 2028.

Uncover how Spotify Technology's forecasts yield a $733.44 fair value, a 51% upside to its current price.

Exploring Other Perspectives

Some of the lowest ranked analysts were assuming Spotify would reach about €22.2 billion in revenue and €2.5 billion in earnings by 2028, yet even they worried that regulation and content costs might blunt user monetization. After a quarter like this, those more pessimistic views could shift, so it is worth weighing both the upbeat consensus and these stricter assumptions as you decide which story you believe.

Explore 26 other fair value estimates on Spotify Technology - why the stock might be worth 24% less than the current price!

Build Your Own Spotify Technology Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Spotify Technology research is our analysis highlighting 4 key rewards that could impact your investment decision.
• Our free Spotify Technology research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Spotify Technology's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.