Stop the presses. Call the Guinness Book of World Records. Hell, someone go check if Trump got rid of taxes. Spotify (the app that’s been losing money since I was downloading playlists in my college dorm) has finally, actually, made a profit. Not just a quarter in the green, but a full year of profitability. For the first time ever. Considering just about everyone I know has been using Spotify religiously since the Obama administration (and somehow still getting served the same five ads on the free tier), it’s wild that it took this long. But hey, better late than never, right?
Let’s get into the numbers and I’ll do my best without boring you (no promises). Spotify pulled off a massive financial turnaround in 2024, reporting $1.23 billion in net income. Just a year ago, they were sitting on a $462 million loss (a number that made investors’ bank accounts weep). Fourth-quarter revenue came in at $4.53 billion, crushing expectations of $4.48 billion. For context, that’s a 16.4% year-over-year increase from the $3.89 billion in Q4 2023.
Monthly active users skyrocketed to 675 million, up a record-breaking 35 million from the previous quarter. That’s the biggest Q4 subscriber jump in company history. Spotify Premium subscribers also grew to 263 million, adding 11 million in just three months, far exceeding analysts’ expectations of 7.9 million (which makes you wonder what analysts even do all day). For comparison, at the end of 2022, Spotify had 205 million premium users… meaning they’ve added almost 60 million paying subscribers in just two years. Operating income landed at $510 million, finally a number with a plus sign in front of it. A massive improvement when you consider they lost money in almost every quarter ever before 2023. Naturally, Spotify stock shot up 10%, because investors all agree that making money is a bullish sign.
Spotify’s "Year of Efficiency" is officially paying off. After years of treating podcasts like traditional media was gonna go extinct, the company finally did what every struggling tech company does… cut costs, lay people off, and jack up prices. Spotify had been spending billions on podcasts, signing massive deals like they were on a shopping spree. Some (Joe Rogan) worked out, but plenty flopped. They finally got smart and started axing the underperformers. In case you missed it, Spotify raised prices twice in under a year. Turns out, when people love your product, they’ll fork over a few extra bucks. They also signed a multi-year agreement with Universal Music Group in January, which might help improve margins.
Spotify’s CEO Daniel Ek is calling 2025 the "year of accelerated execution," which really means "We’re gonna keep making you pay more, but hopefully, you won’t mind too much." Their Q1 projections look solid: 678 million MAUs, another 2 million premium subscribers, and revenue estimated at $4.5 billion. But analysts are already warning that margin expansion may slow down, meaning Spotify will have to work harder (or just charge more) to keep the momentum going.
For years, Spotify felt like that friend who’s always "working on a big project" but somehow still needs to Venmo request you for their half of the bill. But now they finally figured out that making money isn’t a crime. Wall Street is pumped. The stock is soaring. And Ek is probably treating himself to a very expensive celebratory dinner. Moral of the story? If a company that spent years setting money on fire can finally turn a profit, there’s hope for everyone (maybe even Boeing).
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Stock.News has positions in Spotify.
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