New York, Feb 10, 2026, 16:37 EST — After hours
Shares of Spotify Technology S.A. climbed 14.8%, closing at $476.02 in after-hours trading, following an intraday range from $415.03 up to $495.41 earlier Tuesday.
The announcement came after Spotify’s quarterly results and outlook sent shares soaring nearly 18% at one point, fueled by record user growth and a first-quarter earnings forecast that beat Wall Street expectations. Gustav Söderström, now one of Spotify’s co-CEOs, told Reuters their AI-powered “Interactive DJ” boasts “over 98 million paid subscribers.” He also cautioned that “spammy AI music is not a new problem.” (Reuters)
Why it matters now: Spotify aims to boost profit margins without slowing its growth, despite relying on price hikes and battling Apple and Amazon for listeners. For Q1, it predicts operating income of 660 million euros on 4.5 billion euros in revenue, with a gross margin of 32.8% — that’s the portion of revenue left after covering direct service delivery costs.
Spotify took the update as a chance to highlight efforts aimed at boosting user engagement, such as expanding the beta rollout of music videos and broadening creator monetization via its Partner Program. The company also mentioned upcoming moves in audiobooks and books, spotlighting a new feature called Page Match and an upcoming deal to sell physical books in the U.S. and U.K. (Spotify)
Spotify’s user base keeps growing rapidly, adding 38 million net new monthly active users (MAUs) this quarter, pushing the total to 751 million. According to MarketWatch, part of the profit boost came from lower payroll taxes linked to employee share-based compensation, which can fluctuate alongside the share price.
The wider market was more uneven. U.S. stocks slipped as investors digested new earnings reports and anticipated upcoming economic data, keeping an eye on tech shares following their recent bounce. (Reuters)
That said, the figures reignited a previously bearish debate. According to the Financial Times, Spotify’s quarterly profit boost followed recent price hikes. The report also highlighted that record labels are demanding higher platform fees—something that could pinch margins if content expenses outpace subscription growth. (Financial Times)
Questions about valuation and execution also loom over the rally. Investopedia pointed out that worries over AI’s potential to disrupt sections of the music industry have occasionally pressured the stock, despite Spotify posting its strongest user-growth surge in the latest quarter. (Investopedia)
Not all analysts boosted their outlook. Stocktwits noted that some firms lowered price targets after the report, even as they maintained positive ratings. This shows the market’s demand for clear evidence that Spotify’s margin story will hold through 2026. (Stocktwits)
Traders will now focus on whether the post-earnings rally can extend into Wednesday’s session as key macro data arrives: the delayed U.S. January employment report comes out Feb. 11, followed by the January CPI report on Friday, Feb. 13 at 8:30 a.m. ET. These releases often shift rate expectations and can impact high-multiple growth stocks. (Reuters)
