Spotify Technology shares extended their gains in Wednesday's premarket session, rising 0.3% following a substantial 14.8% surge in the prior trading day. The momentum comes after the audio streaming giant projected first-quarter operating income that exceeds Wall Street forecasts.
The company reported 751 million monthly active users for the fourth quarter, with premium subscribers reaching 290 million. Quarterly revenue increased 7% to €4.531 billion, though advertising-supported revenue declined 4% year-over-year. Gross margin stood at 33.1%, with operating income of €701 million.
For the current quarter, Spotify anticipates revenue of approximately €4.5 billion, slightly below the consensus estimate of €4.57 billion. However, its operating income guidance of €660 million surpasses the €652.3 million analysts expected. The company also forecasts monthly active users to grow to 759 million, ahead of projections.
Leadership changes are underway, with Co-CEOs Gustav Söderström and Alex Norström now overseeing daily operations. Founder Daniel Ek has transitioned to executive chairman. Norström described 2026 as the company's "Year of Raising Ambition," highlighting growth in emerging markets.
Spotify continues to diversify beyond music, investing in audiobooks, video podcasts, and AI tools. Söderström noted the AI-powered Interactive DJ feature now engages over 98 million paid subscribers. However, he also acknowledged challenges with "spammy AI music" as the platform expands.
Despite record user gains, revenue growth in the December quarter was the slowest since Spotify's 2018 public listing. The company has relied on price increases and cost reductions to improve profitability. Investors will monitor the earnings Q&A session for updates on pricing strategies, advertising trends, and content moderation.
