Spotify Technology S.A.
Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide. It operates in two segments, Premium and Ad-Supported. The Premium segment offers online and offline streaming access to its catalog of music and podcasts, including video, lossless music, and audiobooks in select markets through subscription offerings primarily sold directly to end users and partners. The Ad-Supported segment provides limited on-demand online access to its catalog of music and online and offline access to its catalog of podcasts on computers, tablets, mobile devices, and other smart devices. The company also offers sales, distribution and marketing, contract research and development, and customer and other support services. Spotify Technology S.A. was incorporated in 2006 and is headquartered in Stockholm, Sweden.
What does it do?
Spotify is the world's most popular music streaming app — think of it as Netflix, but for audio. You pay a monthly fee and get access to over 100 million songs, millions of podcasts, and audiobooks. Open the app, search for anything from Taylor Swift to true crime podcasts, and it plays instantly. It's available in over 180 countries and has more than 640 million users worldwide.
Spotify turned profitable for the first time in 2024 after years of losing money, which is a major turning point that has investors paying close attention. The company is now proving that streaming audio can actually be a real business, not just a growth-at-all-costs story. With $94 billion in market value and accelerating profits, it sits at the center of how the world consumes audio content.
How does it make money?
Spotify makes money two ways. First, Premium subscribers — over 250 million people — pay around $11 per month for ad-free listening, which accounts for the bulk of its $17.2 billion in annual revenue. Second, its Ad-Supported tier lets users listen for free but serves them ads, generating revenue from brands who want to reach those listeners. Revenue grew from $15.7 billion to $17.2 billion last year, a roughly 10% increase, while net income hit $2.2 billion.
Why do investors care?
The big investor story is that Spotify has finally cracked the profitability code after years of razor-thin margins squeezed by music label royalties. The company has been raising prices steadily, cutting costs, and pushing into podcasts and audiobooks — content it can own or license more cheaply than music. If it keeps expanding its paying subscriber base and improves margins, earnings could grow fast from here. Everything hinges on Spotify's ability to keep users hooked and keep raising prices without losing them.
Deep Dive
MemberA full investor briefing on Spotify Technology S.A. — history, leadership, risks, and outlook.