Spotify is aiming for 1 billion users and 20% operating margins by 2030. Here's how it plans to get there | Fortune

Spotify held its first Investor Day since 2022, turning a New York venue into an app extension with themed experiences tied to its podcast ecosystem. The company reported strong progress since the prior Investor Day, including about 18% revenue compound annual growth, more than five percentage points of gross margin expansion, and about $3.5 billion of free cash flow in 2025. As of Q1 2026, Spotify reached 761 million monthly active users and 293 million paid subscribers. Management set long-term targets through an “algorithm” of mid-teens constant-currency revenue growth, 35%-40% gross margins, and operating margins above 20% by 2030, alongside goals of 1 billion active users and about $100 billion in annual revenue. Profitability depends on improving the existing model through revenue growth, marketplace economics, ads, and high-margin add-ons, balanced against reinvestment for growth.

"Spotify sees itself as a multi-product platform with a long runway to better monetize its audience. Since the last Investor Day, Spotify has delivered roughly 18% revenue CAGR, expanded gross margins by more than five percentage points, and generated roughly $3.5 billion of free cash flow in 2025 alone. As of Q1 2026, Spotify reached 761 million monthly active users worldwide, with 293 million on paid subscriptions."

"Led by Co-CEOs Gustav Söderström and Alex Norström, management now frames the future through a long-term "algorithm": mid-teens constant-currency revenue growth, 35%-40% gross margins, and operating margins above 20% by 2030. By the end of the decade, Spotify is also targeting 1 billion active users and about $100 billion in annual revenue."

"Reaching the upper end of the 35%-40% gross margin range depends less on a single breakthrough than on improving the existing model, he said. Revenue growth, improved marketplace economics, a stronger ads business, and high-margin add-ons should all lift profitability over time, he explained. The key variable is how aggressively Spotify reinvests for growth versus allowing more to fall to the bottom line."

Read at Fortune