Spotify shares jumped 13% on May 21 after music streaming platform announced landmark licensing deal with Universal Music Group. The deal allows premium users to create AI-generated covers and remixes of songs from participating artists. The company hosted Investor Day in New York City revealing sweeping AI features and guidance targeting 1 billion users by 2030.
Co-CEO Gustav Söderström and Alex Norström led first investor presentation under new leadership following founder Daniel Ek stepping down early this year. The deal with UMG enables fans to create covers and remixes of favorite songs from participating artists and songwriters signed to label. UMG roster includes Taylor Swift, Ariana Grande, Drake, and Billie Eilish whose catalogs could become available for tool.
Artists and rightsholders have choice whether to participate with Spotify stating product grounded in consent, credit, and compensation principles. This positions Spotify in direct competition with AI music startups Udio and Suno currently facing lawsuits from major labels including Warner Music, UMG, and Sony over alleged copyright infringement.
Spotify announced audiobooks segment on track to reach $100 million in annualized recurring revenue from Audiobooks+ subscriptions by July 2026. The company launched AI-assisted audiobook creation tool developed in collaboration with artificial intelligence voice startup ElevenLabs integrated directly into Spotify for Authors platform. Tool aims to streamline traditional cost-prohibitive production process for independent authors.
Company expects revenue at compounded annual growth rate in mid-teens and gross margins between 35% and 40%. Spotify referred to plans reaching 1 billion subscribers and $100 billion revenue as north star. Platform currently reports 761 million global monthly active users with 293 million subscribers generating $18.5 billion annual revenue in 2025.
Spotify also unveiled Reserved feature partnering with Live Nation identifying artist’s most dedicated fans holding pair concert tickets for them before general public sale.
