Spotify market cap value tops $124bn – as stock price hits record high after posting first full year of profit

Spotify‘s market value surged to a record $124 billion on Tuesday (February 5) after its stock reached an all-time high, fueled by its first-ever full year of operating profit.

Shares of the Swedish audio-streaming giant jumped 13% in New York trading Tuesday, crossing the $600 threshold for the first time, and closing at $621.77.

The stock has skyrocketed 178.5% from a year ago, outperforming the broader tech sector.

The milestone comes as Spotify reported operating income for FY 2024 of €1.4 billion ($1.49bn), marking a turnaround from a loss of €466 million ($497m) in 2023.

At the time of writing, Universal Music Group, the world’s largest music rights company, which trades on the Amsterdam Euronext, has a market cap value of $49.39 billion.

Warner Music Group, also publicly traded, and listed on the NASDAQ, has a market cap value of $16.81 billion.

While the third major, Sony Music, isn’t publicly traded (although its parent, Sony Group, is on the Tokyo Stock Exchange ), it is fair to assume that Spotify’s market cap value is currently worth more than that of all three major music companies combined.

Speaking to analysts during an earnings call on Tuesday, Spotify CEO Daniel Ek said Spotify wasn’t focused on profitability in the first 16 years of business.

“All we were focused on was driving meaningful scale. We did not worry about profitability. And so that’s why you heard me say we have a great product, but not necessarily a great business…. I think we’re now proving that we’re a great business, too.”

Ek attributed Spotify’s profitability to cost reductions and a year of monetization. “And much of that really comes from that added scale that we’re now operating at. Like most platform businesses, more scale begets more profitability,” Ek said.

The swing to profitability came as SPOT’s revenue jumped 18% YoY in 2024 to €15.7 billion ($16.7bn), owing to increased turnover from its Premium subscribers.

The company ended 2024 with 263 million paying users, up 4%, or 11 million net subscribers, from 252 million at the end of Q3 (ending September 30, 2024).

In Q4, Spotify’s total global Monthly Active Users (MAUs) grew 12% YoY to 675 million and by 5% compared to the previous quarter (Q3 2024), when the platform counted 640 million MAUs.

As MBW previously noted, Spotify’s expansion was partially aided by market changes, including the closure of competitor TikTok Music in several key markets. TikTok’s streaming service shut down operations in Indonesia, Brazil, Australia, Singapore, and Mexico in late November 2024.

Spotify also attributed its strong performance in 2024 to “shifts in competitor dynamics in select developing markets.”

The company’s market value is poised to reach new heights as analysts are increasingly optimistic about Spotify’s trajectory. Among 40 analysts tracked by FactSet, the consensus rating is “overweight,” with a $574.32 price target.

Analysts from KeyBanc Capital Markets on Friday (January 31) updated their outlook for Spotify to $600 from $555, as they predicted strong earnings. Ahead of the release of the Q4 and FY2024 results, Citigroup also lifted its stock price target for Spotify to $540 from $500.

Looking ahead, Ek expressed optimism about Spotify’s future trajectory. “I am very excited about 2025 and feel really good about where we are as both a product and as a business,” Ek stated.

Looking ahead to Q1 2025, Spotify CFO Christian Luiga said Q1 is “a seasonally smallest quarter in terms of MAU and subscriber intake as well as ad sales.” The company still expects its MAUs to grow by around 3 million from Q4 2024 to 678 million. Analysts expect MAUs in Q1 to reach 678.65 million, according to data compiled by FactSet.

Spotify forecasts an operating income of €548 million for Q1, well above analysts’ €439 million estimate, while total revenue is anticipated to reach €4.2 billion.

“Spotify’s execution continues to improve and the company enters 2025 with accelerating monthly active user growth, product enhancements in audiobooks & video podcasts, and ability to continue to drive higher gross margins and operating margins.”

Doug Anmuth, JPMorgan

Luiga told analysts: “With respect to the MAU net additions, we had an exceptionally strong quarter four with outperformance driven by developing markets, and we are not prioritizing retention of the recent influx of lower engagement users in quarter one as we continue to focus on growing higher-value users.”

Meanwhile, JPMorgan analyst Doug Anmuth said in a recent note: “Spotify’s execution continues to improve and the company enters 2025 with accelerating monthly active user growth, product enhancements in audiobooks & video podcasts, and ability to continue to drive higher gross margins and operating margins.”

Last week, Spotify said it paid out a record $10 billion to the music industry in 2024, with total payments since its founding reaching nearly $60 billion.

“We estimate that, in 2014, around 10,000 artists generated at least $10,000 per year on Spotify. Today, well over 10,000 artists generate over $100,000 per year from Spotify alone. That’s a beautiful thing,” said David Kaefer, VP, Music Business, Spotify.

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