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(Bloomberg) -- Spotify Technology SA posted another quarter of better-than-expected subscriber growth, with the Swedish music company recording its first-ever annual profit.

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Total active monthly users increased to 675 million, Spotify said in a statement on Tuesday. That compared with the average Wall Street estimate of 664.9 million, according to analysts surveyed by Bloomberg. Paying customers grew to 263 million, also surpassing expectations.

Chief Executive Officer Daniel Ek was able to deliver the first full-year profit in Spotify’s history, reporting net income of about €1.14 billion ($1.2 billion) for all of 2024. The results show Spotify’s efforts to control costs after diversifying into new offerings are paying off. The shares rose 138% last year as co-founder Ek and prioritized profitability after years of expanding into audiobooks and podcasting.

In the first quarter, the company expects to add 3 million monthly active users and about 2 million premium subscribers, the company said. Revenue is expected to rise from a year ago to €4.2 billion and gross margin will hit 31.5%, driven by premium subscriptions ad ads.

Shares rose about 9.8% in premarket trading. The stock closed at $549.08 in New York on Monday.

Earlier this year, Spotify launched a new video-creator offering that will compensate artists and contributors based on how much content viewers consume rather than having to rely on ads. The move will pit Spotify even more directly against YouTube in the growing market for video podcasts.

Spotify also triumphed in a court case against a music royalties collection service that tried to argue the service’s bundled subscription, which includes audiobooks and music, was illegitimate.

(Updates with first-quarter outlook in fourth paragraph)

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