12:35 PM EST, 01/15/2025 (MT Newswires) -- Spotify Technology ( SPOT ) is expected to report Q4 financial results that reflect accelerated margin growth and sustain its growth momentum in 2025, supported by premium subscriber additions and a focus on product upgrades, UBS said in a note Wednesday.

The company is seen to post a 15% year over year increase in revenue in Q4 and cap off 2024 at 32% gross margins, up 520 bps year on year, while its Q1 guidance is expected "to reflect a continuation of solid top-line growth," according to the note.

Seasonality and the launch of its partner program for video podcast in the US, UK, Australia, and Canada are likely to lead to a sequential fall in margins in Q1, UBS said. Under the program, a portion of the premium revenue will be shared with creators, while advertising revenue may drop, the firm said.

"We expect this to initially offset some of the margin upside but lead to potential price increases for the premium base over time," UBS said.

UBS reiterated its buy rating on the stock while raising the price target to $540 from $485.

Shares of Spotify ( SPOT ) were up more than 5% in recent trading.

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