Spotify: Spotify Investor Day Preview

Research evidence excerpt

Spotify: Spotify Investor Day Preview

Deutsche Bank

Research

Rating Company Date

Buy Spotify 18 May 2026

Company Update

North America

United States

Reuters Bloomberg Exchange Ticker Price at 15 May 2026 (USD) 436.94

SPOT.N SPOT US NYS SPOT

Price target 620.00

TMT

775.90 -

Internet 52-week range 412.75

Spotify Investor Day Preview

Valuation & Risks

Benjamin Black, CFA

We contend that Spotify is entering its May 21st Investor Day in a materially

Research Analyst

different position than it did back in 2022. The prior Investor Day required investors +1-212-250-9218

to underwrite a margin bridge that depended on podcasts moving from deeply

negative gross margins, Marketplace scaling, and new verticals such as Kunal Madhukar, CFA

audiobooks not becoming another material investment outlay. In 2022, Spotify laid

+1-212-250-9357

out a long-term model of 20%+ revenue growth, 30–35% consolidated gross

margins in 3–5 years, 40% gross margins over the longer term, and long-term Benjamin Hui, Esq.

operating margins of ~20%; importantly, our skepticism at the time centered on Research Associate

whether podcasts could reach 30–35% gross margins and whether new verticals +1-212-250-2064

would require another elevated spend cycle. Since then, we are of the view that the Raymond Wong

company has earned significant credibility. Consolidated gross margin has Research Associate

expanded from ~25% in 2023 to 33.0% in 1Q26, operating margin has reached +1-212-250-2060

15.8%. Now looking ahead to the 2026 Investor Day, we think the focus will be less Jeff Seiner, CFA

centered on defending the model and more about defining the next leg of growth. Research Associate

+1-212-250-8153

That said, this month's setup is not without controversy. Spotify now has a new