Spotify Q4 Revenue Tops Estimates with €4.53B, EPS €4.43, but Shares Down 34%
Spotify posted Q4 revenue of €4.53 billion, slightly above estimates, and delivered adjusted EPS of €4.43 versus €2.78 expected while adding 38 million monthly active users to reach 751 million. Operating margin climbed to 15.5% on pricing hikes and cost control, yet shares are still down 34% year-to-date.
1. Q4 Earnings and Subscriber Growth
Spotify delivered Q4 revenue of €4.53 billion, narrowly beating the €4.52 billion consensus, and reported adjusted EPS of €4.43 versus €2.78 expected. The company added 38 million monthly active users year-over-year, bringing the total to 751 million, with premium subscribers rising 10% to 290 million.
2. Stock Reaction and Technical Setup
Despite the strong results, Spotify shares remain down 34% for 2026, reflecting investor caution. Technical indicators showed the stock trading below its lower Bollinger band and in oversold RSI territory before a 17% intraday bounce back to its 20-day moving average.
3. Margin Expansion and Pricing Strategy
Operating margin expanded to 15.5% from 11.2% a year earlier, driven by a combination of subscription price hikes and improved cost management. Gross margin of 33.1% also exceeded the company’s 32.9% guidance, highlighting efficiency gains in monetizing its free user base.
4. Advertising Revenue Outlook
Ad revenue growth was a weak point in the quarter as Spotify prioritized subscription gains. Analysts project that rising ad load and higher pricing could add roughly $1 billion in incremental revenue over the next 12 months.