Spotify Technology S.A.'s stock surged 9.27% in pre-market trading on Tuesday, as investors cheered the music streaming giant's anticipated strong fourth-quarter results ahead of the earnings release before market open.

Analysts widely expect Spotify to report robust subscriber growth for Q4 2024, with projections of over 260 million premium subscribers and 665 million total monthly active users. This continued expansion of Spotify's user base, driven by steady consumer demand for its audio offerings, is a key catalyst fueling the pre-market rally.

Furthermore, investors are anticipating a significant turnaround in profitability for Spotify. After years of heavy investment spending, the company is forecasted to post positive adjusted earnings for Q4 and deliver its first full year of profitability in 2024. This profitability boost is attributed to recent price increases for Spotify's premium subscription plans and cost-cutting measures implemented last year.

Beyond the strong Q4 numbers, the market is also optimistic about Spotify's growth prospects in 2025 and beyond. The company's expansion into new verticals like audiobooks and podcasting, as well as its focus on AI and personalization to drive user engagement, are seen as potential catalysts for further revenue and subscriber growth.