Spotify Q2 revenue growth to accelerate to 15.6%, UBS says, driven by price hikes and stable margins.

UBS forecasts Spotify's Q2 revenue to rise 15.6% to €4.8 billion, up from 14.2% growth in Q1, supported by price increases and steady gross margins. Premium subscriber additions are expected to slow to 6 million due to new free tier features and marketing shifts, while average revenue per user and advertising revenue are set to grow. UBS projects gross margins expanding to 33.1% and operating income of €634 million for the quarter. For 2026, UBS maintains revenue growth at 14.3%, expects €3.4 billion free cash flow, and anticipates increased share buybacks after convertible note repayments. The bank rates Spotify shares as Buy but lowered its price target to $690, citing higher costs and a reduced forward multiple, while highlighting AI tools and premium tiers as future growth drivers.