TLDR
- Spotify’s board approved a $1.5 billion increase to its share repurchase program
- Total buyback authorization now stands at approximately $2.223 billion
- SPOT stock gained around 1% in after-hours trading following the announcement
- Q2 free cash flow hit €797 million, with trailing 12-month free cash flow at €3.3 billion
- Wall Street holds a Strong Buy consensus with an average price target of $607.04
Spotify (SPOT) stock climbed roughly 1% in after-hours trading on Thursday after the company announced a $1.5 billion increase to its share repurchase program. The stock was trading near flat during the regular session, down just 0.04% on the day.
The new addition brings total buyback authorization to approximately $2.223 billion. That includes around $723 million still remaining from the existing program.
Spotify said the timing and volume of future buybacks will depend on its share price, market conditions, and other investment opportunities. The company also made clear the program can be paused or cancelled at any time.
The move is backed by a strengthening balance sheet. In Q2, Spotify posted free cash flow of €797 million, pushing its trailing 12-month free cash flow to €3.3 billion.
Subscriber and Revenue Growth
Spotify crossed 300 million Premium subscribers in Q2, up 9% year-over-year. Total monthly active users reached 777 million.
Overall revenue grew 14% year-over-year to €4.8 billion in the quarter. The growth came from a combination of rising paid subscriptions, stronger ad revenue, and tighter cost management.
The company has been shifting its focus from pure user growth toward profitability over the past year. That strategy appears to be paying off in the numbers.
What Analysts Are Saying
Wall Street is broadly positive on SPOT. Based on ratings from the past three months, the stock carries a Strong Buy consensus from 20 Buy ratings and five Holds.
The average analyst price target sits at $607.04, implying upside of nearly 14% from current levels.
Spotify has also been expanding beyond music, pushing into audiobooks and creator tools as additional revenue sources. Management has expressed confidence in sustaining cash generation while continuing to return capital to investors.
The repurchase program will remain in effect as long as shareholder authorization to the board stays in place.
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