Royston Yang, The Motley Fool

Sat, May 24, 2025, 4:57 AM7 min read

• Spotify offers a music streaming service and is seeing healthy traction in paid membership, rising profitability and free cash flows.

• Lyft just turned profitable and free-cash-flow-positive, and has a huge total addressable market that will allow for many more years of growth.

• Leidos enjoys increasing revenue and profits while paying out higher dividends since 2020.

• 10 stocks we like better than Spotify Technology ›

It pays to spot promising growth stocks that you can buy and keep for years or even decades. Such stocks can enable the value of your investment portfolio to increase over the years, bringing you closer to your dream retirement. Stocks that should be on your radar include those with a strong business model and brand, with a track record of growing their revenue and earnings. Ideally, they should also have large total addressable markets that they can tap into for continued growth and sustainable catalysts that will drive the business to the next level.

With the above attributes in mind, here are three attractive growth stocks that you can consider adding to your investment portfolio.

Spotify Technology (NYSE: SPOT) offers a music, podcast, and video streaming service allowing users to access millions of songs and content from creators worldwide. The company is seeing steady growth in revenue and just turned profitable in 2024. Free cash flow ballooned from just 21 million euros to 2.3 billion euros from 2022 to 2024.

Data source: Spotify. Note: All figures in euros. 1 euro is worth about $1.124 at current exchange rates.

Spotify's strong performance continued in the first quarter of 2025. Total revenue rose 15% year over year to 4.2 billion euros, aided by 16% year-over-year growth in the company's premium segment. Gross margin stayed healthy at 31.6% with gross profit climbing 32% year over year to 1.3 billion euros. With operating expenses dipping 2% year over year, operating income more than tripled year over year to 509 million euros. Spotify's free cash flow also leapt 158% year over year to 534 million euros.

Monthly active users (MAUs) increased 10% year over year to 678 million, with around 44% of MAUs coming from Europe and North America. Growth in premium subscribers was better, posting 12% year-over-year growth to 268 million -- 3 million above the company's guidance. Sixty-three percent of premium subscribers came from the two key regions mentioned above. Spotify continues to enhance its offerings to attract more ad-supported and premium members. It expanded its Spotify Partner program to nine new markets so that eligible content creators can enroll, thereby expanding the platform's offerings.