Streaming giant Spotify kicked off 2026 with a mixed but largely optimistic outlook — and investors liked what they saw.

The company forecast first-quarter earnings above Wall Street expectations, sending its shares up nearly 12% in premarket trading. The numbers mark the first full results since co-CEOs Gustav Soderstrom and Alex Norstrom took over from founder Daniel Ek, who transitioned into the role of executive chairman in January.

Profits Up, But Growth Cooling

Spotify expects operating income of 660 million euros in the first quarter — slightly above analyst estimates of 652.3 million euros.

However, its projected revenue of 4.5 billion euros falls just below the 4.57 billion euros Wall Street was anticipating.

In the fourth quarter, revenue rose 7% to 4.53 billion euros — matching estimates but marking the slowest growth rate since Spotify went public in 2018.

So what’s driving the optimism?

Record User Growth Thanks To “Wrapped”

Spotify added a record 38 million monthly active users (MAUs) in the fourth quarter, bringing its total to 751 million globally.

Much of that momentum came from its wildly popular year-end feature, Spotify Wrapped, which turns users’ listening data into shareable social media moments.

The company now expects MAUs to reach 759 million in the first quarter — above analyst projections.

Premium subscribers grew 10% year-over-year to 290 million, although that figure came in slightly below estimates. Spotify forecasts adding 3 million more premium users in Q1, targeting 293 million total.

Interestingly, fewer new users are now coming from Europe and North America, suggesting growth is increasingly driven by emerging markets.

Price Hikes & Cost Cuts Boost Margins

Spotify recently raised the price of its premium subscription by $1 in the U.S., Estonia, and Latvia, bringing it to $12.99 per month. This follows earlier price hikes across more than 150 markets in 2025.

Combined with a 10% drop in operating expenses, these changes helped gross profit climb 10% year-over-year. Gross margin improved to 33.1%, up from 31.6% in the prior quarter.

In short: profitability is improving, even if revenue growth is slowing.

Expanding Beyond Music

Spotify isn’t standing still.

The company has launched AI-generated playlists that users can create through simple prompts, pushing deeper into personalized listening experiences.

It’s also doubling down on video podcasts — including a deal involving Netflix content — while expanding into physical book sales to complement its audiobook offerings.

All of this comes as competition from Apple and Amazon intensifies in the streaming and digital media space.

Leadership Era Begins

These results mark the early tone of Spotify’s co-CEO structure under Soderstrom and Norstrom.

With Daniel Ek stepping back from day-to-day operations, investors are watching closely to see whether the new leadership can sustain profitability while reigniting faster revenue growth.

Final Words

Spotify’s latest quarter tells a nuanced story.

User numbers are soaring. Profits are improving. Price hikes are working. But revenue growth is cooling, and subscriber forecasts are slightly under expectations.

For now, Wall Street seems encouraged by the profitability trend and strong user momentum.

The bigger test? Whether Spotify can turn that massive 751 million-user base into even stronger long-term revenue growth in an increasingly crowded streaming battlefield.