03:04 PM EDT, 10/07/2024 (MT Newswires) -- Spotify Technology ( SPOT ) could end the year at over 30% in gross margins and follow it up with similar figures in 2025 thanks to a number of factors, including healthy subscriber growth, UBS said in a note emailed Monday.

The firm said it expects the company to benefit from price increases, more subscribers, and a faster pace of margin expansion and forecasts 2025 gross margin of 31.2%, higher than the Street estimate of 30.9%.

In the immediate term, UBS lowered its Q3 revenue forecast for the company to 4.01 billion euros ($4.40 billion) from 4.05 billion euros, citing foreign exchange headwinds. For Q4, UBS said it expects the company to generate 4.18 billion euros in revenue.

Meanwhile, UBS said monetization remains the focus at the company which could drive 1.7 billion euros in free cash flow in 2024, increasing to 2.4 billion euros next year.

UBS reiterated its buy rating on the stock with a 12-month price target of $415.

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