Investing.com -- Spotify Technology (NYSE: SPOT) shares have surged over 14% premarket on Tuesday after the streaming giant reported fourth-quarter earnings that significantly exceeded analyst expectations, driven by robust user growth and improved profitability.

The audio streaming platform reported earnings per share of €4.43 for the fourth quarter, substantially beating the analyst estimate of €2.85. Revenue came in at €4.53 billion, slightly above the consensus estimate of €4.52 billion and up 7% YoY (13% on a constant currency basis). Monthly active users (MAUs) reached 751 million, surpassing analyst expectations of 745.24 million and representing 11% growth from the previous year.

"We are pleased with our performance heading into 2026 and view the business as well-positioned to deliver growth and improving margins," said the company in its earnings release. Spotify added a record 38 million MAUs in the quarter, exceeding its own guidance of 32 million.

The company’s premium subscribers grew 10% YoY to 290 million, with 9 million net additions in the quarter. Gross margin improved to 33.1%, up 83 basis points from the previous year, while operating income jumped 47% YoY to €701 million, representing a 15.5% margin.

For the first quarter of 2026, Spotify forecasts revenue of €4.5 billion, slightly below the consensus estimate of €4.57 billion. However, the company expects monthly active users to reach 759 million, above analyst projections of 752.45 million.

"We paid out over $11 billion to the music industry in 2025 - the largest annual payment to music creators in history," the company noted, highlighting its continued investment in the creative ecosystem.

Free cash flow for the quarter was €834 million, bringing the full-year 2025 total to €2.9 billion, demonstrating Spotify’s strengthening financial position despite currency headwinds that slowed revenue growth by approximately 580 basis points.