Spotify Raises Premium Plan Prices Up to $2 While Reporting 7.1% Revenue Growth
Spotify will raise U.S. Individual Premium plan rates from $11.99 to $12.99, duo plan to $18.99, family plan to $21.99, and student rates to $6.99 starting next month, boosting potential ARPU. In Q3 Spotify reported EPS of $3.83 beating consensus by $1.96 on $5.01B revenue, up 7.1% year-over-year.
1. Spotify Raises Subscription Fees in U.S.
In mid-January, Spotify announced it will increase the monthly cost of its Individual Premium plan from $11.99 to $12.99, marking the first price adjustment since June 2024. The new pricing schedule also moves Duo plans to $18.99, family plans to $21.99 for up to six profiles and student plans to $6.99. The company said the change reflects rising licensing fees and investments in podcast and AI-powered personalization features designed to enhance user engagement and reduce churn among its 214 million Premium subscribers worldwide.
2. Csenge Advisory Group Boosts Stake Significantly
During the third quarter, Csenge Advisory Group increased its position in Spotify by adding 2,317 shares, a 277.8% gain that brought its total holdings to 3,151 shares valued at $2.20 million as of the latest SEC filing. Other institutional moves included Knuff & Co’s new $27,000 position and Total Investment Management’s $29,000 entry, while Sound Income Strategies lifted its holding by 156.3% to 41 shares. Institutional ownership now accounts for 84.09% of Spotify’s outstanding shares, underscoring confidence among large investors despite broader market volatility.
3. Analysts Maintain Bullish Outlook Despite Price Targets Adjustments
In recent weeks, UBS trimmed its target from $850 to $800 and Barclays cut its outlook from $750 to $700, but both reiterated buy and overweight recommendations, respectively. Argus and Citizens Jmp initiated coverage with buy and market-outperform ratings, setting targets at $845 and $800. Across 34 analyst reports compiled by MarketBeat, two gave strong buy ratings, twenty-three issued buys and nine remained neutral, leading to a consensus Moderate Buy stance. The average price objective stands at $743.90, implying room for upside as Spotify continues to grow revenue through subscription and ad-supported tiers.
4. Q3 Earnings Exceed Expectations, Driving Investor Confidence
Spotify’s most recent quarterly report delivered $5.01 billion in revenue, up 7.1% year-over-year, and earnings per share of $3.83, which outpaced consensus forecasts by $1.96. The company achieved an 8.46% net margin and a return on equity of 21.68%, reflecting effective cost management amid content licensing inflation. Active users reached 597 million, a 4% increase from the prior year, while monthly active users on the ad-supported tier grew by 6%, demonstrating continued strength in both subscription and ad revenue streams.