Spotify Technology SA (NYSE:SPOT) is moving ahead with another price increase as it seeks to strengthen profitability amid moderating growth, leadership changes and heightened attention from investors and artists alike.
Spotify Lifts Premium Prices Again
The music streaming giant said Thursday it will increase the price of its Premium subscription in the U.S., Estonia and Latvia to $12.99 per month, up from $11.99, with the change taking effect on February billing cycles.
The move marks Spotify's third U.S. price hike in less than two years. The company raised U.S. Premium prices to $10.99 in July 2023 and to $11.99 in June 2024, CNBC reported on Thursday.
Spotify has also implemented price increases in other regions over the past year as it works to align subscription fees with inflation and rising costs.
JPMorgan estimated that even a $1 monthly increase could add close to $500 million to the company’s annual revenue.
User Growth Remains Solid, Guidance Lags
Despite the pricing pressure, Spotify continues to post healthy user growth. In November, the company reported strong third-quarter earnings.
Spotify earned $3.83 per share, well above the consensus estimate of $1.87, while revenue increased 7% to $4.99 billion, beating forecasts of $4.92 billion.
The company reported accelerating user growth, with monthly active users rising by 17 million to 713 million, exceeding its own outlook.
Premium subscribers grew 12% to 281 million, in line with expectations.
Looking ahead, Spotify guided fourth-quarter 2025 revenue to $5.26 billion, above consensus. It forecasted Premium subscribers to reach 289 million and total monthly active users to climb to 745 million.
Leadership Transition And Market View
The price increase comes as Spotify transitions into a new leadership structure.
Co-founder Daniel Ek stepped down as CEO at the start of January, handing the reins to co-CEOs Gustav Söderström and Alex Norström, a move announced last September.
Investor sentiment around the stock has remained mixed. Last November, CNBC’s Jim Cramer recommended a Buy to Spotify calling it "a great subscription business," even as the company balances pricing power with user growth.
SPOT Price Action: Spotify Technology shares were down 3.36% at $511.15 at the time of publication on Thursday, according to Benzinga Pro data.
Image via Shutterstock
