Story Stocks^®

Spotify (SPOT) is surging higher after delivering a blowout 4Q25 earnings report featuring record-breaking profitability and user growth. The streaming giant's results, highlighted by a record 33.1% gross margin and a massive beat in Monthly Active Users (MAUs), have reignited investor confidence. This performance effectively validates SPOT's pricing power and its shift toward a high-margin, diversified audio ecosystem.

• SPOT easily beat 4Q25 EPS expectations as gross margin hit a record 33.1% (+83 bps yr/yr), fueled by Marketplace scaling and improved podcast/audiobook efficiency.
• MAUs jumped 11% to 751 mln, comfortably beating estimates due to strong international expansion and "Spotify Wrapped" momentum.
• Premium Subscribers grew 10% to 290 mln. Despite recent price hikes, churn remained lower than anticipated, proving platform stickiness.
• The "Spotify Wrapped" campaign engaged over 300 mln users, acting as a high-impact acquisition tool for the Premium tier.
• While the €4.5 bln revenue guide was conservative, MAU guidance of 759 mln and Premium Subscriber target of 293 mln both exceeded analyst projections.

Briefing.com Analyst Insight

Today's rally reflects a fundamental re-rating of SPOT’s risk-to-reward profile. The company has successfully transitioned from "growth at all costs" to a high-margin cash machine, with the 33.1% gross margin serving as a major proof point for its multi-vertical strategy. While the Q1 revenue outlook was characteristically conservative, the underlying momentum in MAUs -- especially the record holiday additions -- suggests SPOT's market dominance is only intensifying. As long as the company maintains its disciplined operating expenses and leverages its creator tools to drive margin expansion, the stock is likely to hold these new highs.