At the end of 2020, the number of monthly active users was 345 million, a 27 percent increase compared with a year earlier.
Paying subscribers, the main source of revenue for the streaming service, stood at 155 million, a 24 percent increase.
Spotify, which is based in Stockholm but listed on the New York stock exchange, said in October that it hoped to reach between 340 and 345 million active users and 150 to 154 million paying subscribers.
“We believe the pandemic had little impact on our subscriber growth and may have actually contributed positively to pulling forward new signups,” the company said in a statement.
Spotify's net loss tripled however, to 581 million euros ($698 million) from 186 million euros in 2019, mainly because of higher operating expenses.
In the fourth quarter, operating expenses grew by 17 percent from the same period a year earlier as social charges, such as payroll taxes and expenses related to share-based compensation, weighed on the company's bottom line.
Spotify reported sales of nearly 7.9 billion euros, up by 16.5 percent year-on-year and in line with estimates from analysts polled by Bloomberg.
In 2021, the company expects an operating loss of between 200 and 300 million euros, close to its equivalent loss last year of 293 million.
The music streaming company has invested heavily in podcasts, spending nearly $235 million to buy US publishing platform Megaphone, and signing a deal with popular podcast host Joe Rogan.
The Megaphone deal raised Spotify's investment in podcasts to more than 800 million dollars over the past two years.
Spotify has also shown interest in audio books, the only part of the publishing industry to post double-digit annual growth rates.
At the end of January, it put several such books on its platform, with classic works now in the public domain narrated by actors such as Hilary Swank and Forest Whitaker.