Streaming giant Spotify has shared its fourth quarter 2025 earnings, tripling its profits and marking a strong end to the year.
As outlined in its earnings report, Spotify had its biggest-ever increase in active monthly users, growing to 751 million users.
Currently, a US-based subscription costs US$12.99 (AUD $18.37 at today’s current rate) a month, up from US$11.99 (AUD $16.96) a month when prices were raised in December. The platform has raised prices a number of times over the past few years in small increments each time in a push towards more sustainable profitability. Thus far, users have been willing to accept price increases as reflected in a steady increase of listeners.
This level of growth may appear particularly notable given recent backlash the platform has faced. Despite multiple reports of user boycotts in regards to AI use and concerns for artists regarding proper compensation, the platform has continued to increase its revenue streams and overall user base through leveraging the powers of AI for personalisation to enhance recommendations, engagement and overall monetisation.
Key findings from the report included total revenue increasing by 13 per cent year-on-year on a constant currency basis to EU4.5 billion (AUD 7.57 billion), reflecting steady growth across advertising and subscriptions. Profitability also increased, with their gross margin improving by 83 basis points to 33.1 per cent, largely driven by better operating leverage and cost efficiency. Operating income reached EU$701 million (AUD $1.18 billion).
At first glance, ad-supported revenue seemed to have fallen 4 per cent, compared to last year; however that decline was due to currency exchange effects as Spotify operates in multiple international markets. Taking this into account, ad-supported revenue actually grew 4 per cent.
The business grew as it sold more ads and gained more podcast sponsorships, especially through automated ad channels. Growth for ad-supported revenue was intentionally limited partly due to lower ad prices in music and the company’s deliberate reductions in how much podcast ad inventory was available, limiting the amount of advertising sold.
“The next wave of technology shifts—AI, new interfaces, wearables, new ways of interacting with content—these will reshape how people discover and experience audio and media. The hard problems ahead—in music, in podcasts, in books, in video, in live, and in things we haven’t built yet—we’re going to keep building the technology to solve them,” said Daniel Ek, founder and executive chairman.
“Our job is to understand new technologies quickly and capture their potential, which we’ve done time and again. The entire industry stands to benefit from this [AI] paradigm shift but we believe those who embrace this change and move fast, will benefit the most,” concluded Gustav Söderström, co-CEO of Spotify.
