Spotify has hit more than 140 million active monthly users.
However, the music streaming company is still deeply in the red.
The Swedish company had revenues of more than 2.9 billion euros in 2016, up more than 50% compared with 2015.
However, operating losses rose at nearly the same pace to 349.4 million euros.
Spotify is considering going public and listing on the stock market, so its latest figures will be under scrutiny.
“We believe we will generate substantial revenue as our reach expands and that, at scale, our margins will improve,” the company said.
“We will therefore continue to invest relentlessly in our product and marketing initiatives to accelerate reach.”
Spotify reported a net loss of 539.2 million euros, more than double the figure for 2015.
Nevertheless the number of people listening to music on the platform continues to rise rapidly.
Paying subscribers to its premium service, which does not have advertising, rose by 20 million to 48 million.
Apple Music, a key competitor, now has 27 million subscribers, almost double the number 12 months ago. Unlike Spotify it does not offer a free tier.
More than 30 million tracks are available on Spotify, which has signed deals committing it to pay a minimum of 2 billion euros in royalties to record companies over the next two years.
Spotify raised more than $1 billion from investors in 2016 which it said would give it flexibility to expand regardless of the state of the stock market.
Some of the terms are tied to the IPO, putting pressure on the company to go public.