According to the streaming service, revenue grew by 128 percent in 2012 to reach $573.1m. The figure was an increase on the $246.7m worth of revenue seen in 2011.
However, despite this growth, the company also saw an increase in losses with the figure rising to $77.4m from the $58.8m seen the previous year.
Spotify reported that the global number of active users doubled to reach 20m – five million pay for the premium subscription service. The rise is due to an expansion into different territories.
A spokesperson for Spotify told Music Week: ‘During 2012 Spotify saw dramatically increased revenues while maintaining a free to paid conversion rate of well over 20 percent – unheard of for a freemium business, and a clear demonstration of the success of the business model.
‘In 2012 the business focused on driving user growth, international expansion and product development, resulting in soaring user numbers and increased market penetration.’
According to reports, Spotify is thought to pay about 70 percent of revenue back to rightsholders.
Last month, the service was at the centre of a debate on the pros and cons of streaming after Thom Yorke and Nigel Godrich withdrew their Atoms for Peace album.