spotify Shares soared 13% on Thursday after the music streaming platform laid out its 2030 guidance and reached an artificial intelligence deal with Universal Music, as the technology raises concerns about major disruption across the industry.
The company expects earnings in the mid-teens with compound annual growth rates and gross margins in the 35% to 40% range. Spotify has called its plan to reach 1 billion subscribers and $100 billion in revenue its “North Star.”
“We’re still firing on all cylinders,” co-CEO Gustav Söderström told CNBC’s Julia Boorstin at the company’s first investor day since 2022. “The number of free users and subscribers has increased significantly,” he said.
As part of the deal with Universal, Spotify will allow users to create covers and remixes using the voices of artists and songwriters who have opted in.
Spotify said the tool will be released as a paid add-on for premium users, providing a new revenue stream for artists. The company previously said it was working with major music labels to develop “responsible” AI products, but did not reveal specific tools.
Söderstrom told CNBC that the deal with Universal expands Spotify’s existing content catalog and allows artists and songwriters to participate in the AI innovations happening across the industry. Artists on this music label include Billie Eilish and Taylor Swift.
“It was impossible for existing creators to participate because there was no legal licensing framework,” he said.
Spotify is in the midst of a restructuring, and the stakes are high.
The stock has lost about a quarter of its value in the last year. This is the company’s first investor day in four years and will be held under the direction of new co-CEOs Söderström and Alex Norström. Founder and former CEO Daniel Ek stepped down earlier this year after nearly 20 years at the helm.
Spotify is also betting on areas like audiobooks and podcasts to prove it can be more than a music streaming platform.
At the same time, the music industry is also undergoing major changes.
As music-generating platforms grow in popularity and the line between AI and human-made music blurs, record labels are struggling with how to protect artists from copyright infringement.
There are already lawsuits within the industry.
In 2024, Warner Music, UMG, and Sony sued AI music startups Suno and Udio for using copyrighted songs to train their AI models.
Suno, which raised $250 million in November, settled with Warner Music last year and signed a deal that allows users to create AI-generated music featuring participating artists. Universal and Warner both settled with Woodio.
Spotify also announced updates to subscription and audiobook features for certain creators on the platform. The company also launched a program that allows certain megafans to purchase two concert tickets before they go on sale to the general public.
Since 2022, Spotify announced that it has added more than 340 million new users to its platform, and its subscriber base has grown by more than 110 million.
Spotify stock price chart from the beginning of the year to date.
