The above button links to Coinbase. Yahoo Finance is not a broker-dealer or investment adviser and does not offer securities or cryptocurrencies for sale or facilitate trading. Coinbase pays us for certain activity generated through this link. Prices displayed are informational.

Spotify Technology SA (NYSE:SPOT) is poised for a strong first quarter earnings report, with UBS analysts projecting accelerating revenue and margin growth and Sensor Tower data hinting at upside in subscriber additions.

For the second quarter, UBS expects the music streaming platform to highlight further revenue acceleration and sequential margin gains, supported by a full-quarter benefit from recent US price increases, though subscriber growth may slow slightly due to tougher year-over-year comparisons.

Despite this, full-year metrics are expected to remain consistent with last year in terms of premium net adds and monthly active user growth.

UBS also sees potential for Spotify to expand its premium service through additional features, AI tools for users and creators, and non-music ventures, opening new monetization avenues.

UBS projects first-quarter revenues of €4.55 billion, slightly above Spotify’s €4.5 billion guidance, representing 14.7% foreign exchange neutral (FXN) growth compared to12.7% in Q4.

Premium net adds are estimated at 3.4 million, down from 5 million a year ago, partly due to churn from price increases, partially offset by marketing campaigns shifted to March.

FXN ARPU is forecast to rise 5.3% to €4.73, driving 15.6% FXN premium revenue growth, compared with 13.9% in Q4.

Advertising revenues are expected to improve modestly in the first half, aided by new licensing deals and easier year-over-year comparisons, with further gains in the second half as automated channels contribute more.

Gross margins are projected to rise to 32.8%, helped by higher prices outpacing content costs, though partially offset by audiobook bundle growth and partner program investments.

Operating income is estimated at €663 million, slightly above guidance, with operating expenses growing in the mid-single digits.

Looking ahead, UBS expects Q2 revenues of €4.7 billion, with 16.4% FXN growth in premium revenues and 7% FXN growth in advertising. Premium net adds are projected at 5.3 million, below last year’s 8 million, while FXN ARPU growth is expected to improve to 7.3% thanks to US price increases. Gross margins are forecast at 32.9%, up 140 basis points year-over-year.

UBS maintained its 2026 outlook, projecting €19.4 billion in revenues, 33.2% gross margins, and €3.6 billion in free cash flow, up 25% from 2025.

UBS also noted that the company’s upcoming Investor Day in May could serve as a positive catalyst, highlighting management’s strategy to deliver differentiated products and sustainable double-digit growth.

The analysts reiterated a Buy rating on the stock, with a price target of $760, based on 30x forward EBITDA. Spotify’s US-listed stock traded hands at $490 on Thursday afternoon.

The company is due to report its Q1 earnings on April 28.