Spotify’s Record User Growth Raises Questions On Earnings And New Leadership

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St’s investing ideas for FREE.

• Spotify Technology (NYSE:SPOT) reported its strongest quarter for user growth, adding 38 million new monthly active users in Q4.

• Management linked the user gains to its Wrapped campaign, AI-powered features, and the rollout of music videos and audiobooks.

• The company also reported improved profitability in the quarter.

• Founder Daniel Ek will become executive chairman, while Gustav Soderstrom and Alex Norstrom step in as co-CEOs.

For you as an investor, this update connects product developments, user trends, and leadership changes at Spotify in a single move. The company operates a global audio platform focused on music, podcasts, and more recently audiobooks and video. The latest quarter highlights how product experiments and AI tools are feeding into user growth. The leadership changes indicate an effort to formalize how the business is run while keeping the founder closely involved.

Looking ahead, the key questions are how Spotify uses its larger user base and AI-driven personalization to support its long-term financial profile, and how the new co-CEO structure shapes decision making. As the company expands into adjacent content formats, investors may watch whether engagement and monetization keep pace with rising scale.

Stay updated on the most important news stories for Spotify Technology by adding it to your watchlist or portfolio. Alternatively, explore our Community to discover new perspectives on Spotify Technology.

How Spotify Technology stacks up against its biggest competitors

• ✅ Price vs Analyst Target: At US$414.84, the share price sits well below the US$732.72 analyst target, a gap of roughly 43%.

• ✅ Simply Wall St Valuation: The stock is described as trading 50.2% below an estimated fair value, which screens as undervalued in this model.

• ❌ Recent Momentum: The 30 day return of 23.09% decline shows recent weakness despite the strong Q4 headlines.

Check out Simply Wall St’s in depth valuation analysis for Spotify Technology.

• 📊 Record Q4 user growth and a co CEO structure both feed into the long term question of how Spotify converts a larger audience into sustainable earnings.

• 📊 Keep an eye on monthly active users, engagement with AI features and audiobooks, and how the current P/E of 51.07 trends relative to the industry average of 27.72.

• ⚠️ Leadership transition to co CEOs introduces execution risk, so consistency in profitability and content spend will be important to track.

For the full picture including more risks and rewards, check out the complete Spotify Technology analysis.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include SPOT.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com