🎧📈 Spotify: Strong stock growth thanks to record profits and an effective strategy!
I'll follow up on the post from @lukasnekvapil About Spotify and the quarterly results!
Spotify Technology $SPOT is a global streaming service focused on music, podcasts and audiobooks. The company offers a rich catalog of content that includes exclusive deals with popular creators. Spotify is becoming an increasingly important player in the global audio industry due to its strategic initiatives and strong commitment to profitability. 📈🎙️
The company's stock has been experiencing tremendous growth lately. Today, the company reported fiscal second quarter results that not only beat expectations, but also delivered record earnings, gross margin and free cash flow. All thanks to a new strategy focused on efficiency. 📊
Key points:
Operating profit: Spotify Spotify reports an operating profit 266 million euros ($289 million) compared to a loss 247 million euros in the previous period. It thus beat its own guidance of EUR 250 million.
Net profit: Net profit amounted to EUR 274 million (USD 298 million), representing a profit of 1.33 euros per share, well above analysts' expectations.
Gross margin: reached a record 29,2 %, beating the company's outlook 28,1 %. It is expected to rise in the third quarter to 30,2 %.
Revenue and users: Revenue met expectations ofEUR3.81 billion (USD4.14 billion), up 20 % up 20% from the prior year.
The number of monthly active users reached 626 million, down froman estimated 631 million, but still a 14 % more than the previous year.
The number of premium subscribers grew to 246 million, exceeding expectations.
Strategic steps:
Increase the price of premium subscriber plans in the US.
Layoffs and initiatives to drive sales growth and improve margins, such as music-only streaming levels and an audiobook-only plan.
Inclusion of a more expensive audio package that combines music, podcasts and audiobooks.
Investing in podcasts: The company spent 1 billion dollars to enter the podcast market, which included studio acquisitions and exclusive contracts. However, it is now focusing more on distribution than exclusivity, which is improving its profitability. 🧑💼🎙️
Competition: In the streaming music and podcast sector, the biggest competitor is Apple with their Apple Music.
This strategic action has led to a sharp rise in the share price, which is up over 74% since the beginning of the year.
What is your opinion of Spotify and its performance?
Thanks for the overview. Great business for me, but currently the stock is just expensive.
Spotify is great, in the end it has only one competitor in Apple Music. But that's getting bigger all the time. They're the two leading players, so great business.