SPOT-BULLISH SCENARIOSpotify (SPOT) will announce Q2 earnings, with confirmed price hikes hitting subscription plans in various countries, including the US, UK, Spain, France, New Zealand, Hong Kong, and Peru. The ad-free premium plan will rise by $1 to $10.99, Duo plan by $2 to $14.99, family plan by $1 to $16.99, and the student plan by $1 to $5.99 per month.
Existing subscribers will have a one-month grace period before the new prices take effect. Competitors Apple Music, Amazon Music, and YouTube Music have also raised their prices. Analysts expect the price hikes to contribute to a 5% revenue bump for 2024.
Despite concerns about subscriber numbers, analysts anticipate solid Q2 earnings for Spotify, with improved profitability and a 20% increase in monthly active users year-over-year. Wall Street expects Q2 revenue of 3.21 billion euros, a loss per share of -0.66 euros, and a total of 530 million monthly active users.
Analysts have been positive about Spotify's profitability efforts, and the company's beat on gross margin expectations in the first quarter has boosted sentiment. Spotify aims for a gross margin between 30% and 35% in the long term as it scales its podcasting and ads business.
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