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 songs and podcasts. You pay a monthly fee (or listen to ads for free) and get access to over 100 million tracks, millions of podcasts, and audiobooks. It's available in over 180 countries and has around 675 million users worldwide. If you've ever hit shuffle on a playlist or discovered a new artist through a personalised recommendation, you've seen exactly what Spotify does.
Spotify turned profitable in a meaningful way for the first time in 2024, which is a big deal — the company spent years burning cash to grow its user base and now investors are seeing that the business model can actually make real money. With a market cap of $99 billion, the market is betting that Spotify becomes the dominant global audio platform the same way Google owns search. The shift from 'growth at all costs' to 'growth with profit' is exactly the kind of turning point that gets investors excited.
How does it make money?
Spotify makes money in two main ways. The first and biggest is Premium subscriptions — roughly 250 million paying users hand over around $10–$12 a month, which accounts for the bulk of its $17.2 billion in annual revenue. The second is its Ad-Supported tier, where free users listen to ads between songs and Spotify earns money from advertisers. Revenue grew from $15.7 billion to $17.2 billion in the latest year — about a 10% increase — and the company swung to a $2.2 billion net profit, a dramatic improvement from previous years of losses.
Why do investors care?
The core growth story is simple: more paying subscribers, higher prices, and better margins. Spotify has been quietly raising subscription prices globally while simultaneously cutting costs — particularly in headcount and podcast spending — and the results are showing up in the profit line. Investors also see a long-term opportunity in turning Spotify into an advertising business that rivals YouTube for audio, and in expanding into audiobooks, which opens a whole new paying audience. For the thesis to work, Spotify needs to keep growing its Premium subscriber count and prove it can sustain these profit margins without losing users to Apple Music or Amazon Music.
Deep Dive
MemberA full investor briefing on Spotify Technology S.A. — history, leadership, risks, and outlook.