Spotify Technology (SPOT +1.92%) competes with Apple, Alphabet (YouTube), and Amazon (Prime) in the streaming audio industry. Spotify has certainly carved out its share; the company has 751 million monthly active users, who utilize the service for music, podcasts, and other audio content.
Investors may underestimate how sticky Spotify can be. For many people, it's hard to switch after you've spent years fine-tuning your library and allowing the service's algorithms to learn your tastes inside and out.
Now, the company seems to be shifting its focus from acquiring as many users as possible to monetizing them. Here is what that might look like and why Spotify stock could deliver impressive returns over the coming years.
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The delayed gratification of a platform business
The beauty of a platform business is that the math works in your favor as the platform grows.
Suppose Spotify were to spend $10 million on an exclusive podcast deal. The company had 345 million monthly active users at the end of 2020. At that time, that deal would cost the business nearly 2.9 cents per user. Had that deal occurred at the end of last year, when Spotify touted 751 million users, that per-user cost would be just over 1.3 cents.
Data by YCharts.
There's a long-term game being played here. That's why Spotify and other platform businesses will endure losses early on to grow their user base as much as possible. As the platform grows, profit margins improve, as shown above.
Primed for strong earnings growth ahead
NYSE: SPOT
Key Data Points
Notably, Spotify has begun increasing prices more frequently. Its most recent increase, in February 2026, was its third hike in less than three years. But Spotify continues to enjoy strong user growth as it raises prices. Monthly active users grew by 11% year over year in the fourth quarter of 2025, and by 5% from the prior quarter.
Audio is still one of the most portable, accessible, and cheapest forms of entertainment. That means a lot, especially as you get into international markets. According to Coherent Market Insights, the global audio streaming market could grow by 12.5% annually to over $100 billion by 2033.
This combination of user growth and higher service prices bodes well for Spotify's earnings growth. Analysts currently estimate the company will grow earnings by an average of 29% annually over the next three to five years. Those are high expectations, but if Spotify can deliver, the stock is arguably a bargain at its current valuation of 31 times 2026 earnings estimates.
