Spotify Technology S.A.'s stock surged 5.63% on Monday in anticipation of the company reporting strong fourth-quarter results on Tuesday before the market open. The music streaming giant is expected to deliver another quarter of robust subscriber growth and profitability gains.

Analysts are projecting Spotify to report a 13.3% year-over-year increase in revenue to 4.16 billion euros, driven by steady consumer demand for its audio offerings and recent price increases for its premium subscription plans. The company is also anticipated to post positive adjusted earnings of 1.89 euros per share, a significant turnaround from a loss in the year-ago quarter.

The optimism surrounding Spotify's upcoming results stems from the company's success in expanding its subscriber base globally. Wall Street expects Spotify to report over 260 million premium subscribers and 665 million total monthly active users in Q4, up from 236 million and 602 million respectively in the prior year period.

Beyond the strong Q4 numbers, investors are also looking ahead to multiple catalysts that could drive Spotify's growth in 2025 and beyond. These include the recent launch of new pricing tiers catering to different consumer segments, expansion into new verticals like audiobooks and podcasting, and improved monetization through building out its own advertising platform.

Additionally, Spotify recently announced a new multiyear distribution deal with Universal Music Group, though the financial implications remain unclear. While the agreement could impact Spotify's costs related to royalties, analysts believe the comprehensive nature of the deal likely provided value for the streaming platform in exchange for granting Universal access to certain releases and products.

Overall, Wall Street remains optimistic on Spotify's prospects, with 29 Buy ratings among analysts covering the stock. The company's ability to drive strong subscriber growth globally while improving profitability through price increases and new revenue streams has reignited investor confidence after a challenging period in 2022.