Spotify Q4 Beats Estimates with Record Users

Spotify reported robust fourth-quarter results on Tuesday, surpassing expectations with record user growth and improved profitability, sending its shares up as much as 15 percent in premarket trading. The Luxembourg-based music streaming company added 38 million monthly active users, reaching a total of 751 million, while premium subscribers climbed 10 percent year over year to 290 million.

The results highlighted Spotify's ongoing expansion in both paid and ad-supported segments. Premium revenue increased 8 percent to 4.01 billion dollars, supporting overall quarterly revenue of 4.53 billion dollars, a 7 percent rise from the previous year and in line with analyst forecasts. Ad-supported revenue dipped 4 percent to 518 million dollars, though the company noted a 4 percent increase in ad sales on a constant-currency basis, driven by higher impressions in music advertising and podcast sponsorships. Gross margin reached a company record of 33.1 percent, up 83 basis points from the year-earlier period, contributing to operating income of 701 million dollars, a 47 percent improvement. Net income stood at 1.17 billion dollars, compared to 899 million dollars a year ago, with...