Spotify targets mid-teens revenue growth and 20%+ operating margins by 2030
Spotify set financial targets through 2030 that exceed Wall Street expectations, projecting mid-teens constant-currency revenue growth alongside gross margins of 35-40% and operating margins above 20%. The company reported gross margins of approximately 32% and operating margins of 13% in 2025.
UBS analysts said the targets outpaced Street consensus, forecasting 14% revenue growth versus a 12% estimate and 37% gross margins versus 36%.
Pricing and user conversion will drive growth
Spotify expects to reach one billion monthly active users before 2030, drawing from a global base representing roughly 3.5% of the population. The company plans to boost revenue through pricing increases, new subscription tiers, and converting free users to Premium.
Advertising revenue will grow double-digit beginning in the second half of 2026, management said.
AI Remix tool launches with Universal Music Group
Spotify unveiled Remix, a paid add-on developed with Universal Music Group that lets users create AI-generated covers and derivative works. Rights holders share in the economics, and the feature does not require participation from all major labels.
Management expects the tool to be margin-neutral to margin-accretive. UBS said it anticipates a deal with Warner Music Group before year-end.
The company is building these features on a proprietary "large taste model," a generative AI system designed to power personalization at scale.
Marketplace and podcast expansion drive margin gains
Spotify's marketplace business has expanded fourfold since 2021 and will contribute to margin improvement. The company targets approximately 40% gross margins for podcasts in the long term.
Other announced products include audiobook add-ons, Spotify Reserved for live event ticketing, and AI-driven playlist and save features. UBS maintained a Buy rating with a $735 price target, citing greater clarity on the company's monetization strategy.
Your membership also unlocks:
