Core Insights - Spotify's CEO Daniel Ek expressed confidence in the company's resilience amid global uncertainty and volatility, suggesting that Spotify is becoming increasingly essential to users' lives [1] - Despite a 9% drop in shares following Q1 earnings and 2025 forecasts, Ek reassured investors about the long-term growth story of Spotify, attributing short-term fluctuations to broader macroeconomic conditions [2] - The company reported a 10% year-on-year increase in monthly active users (MAUs), reaching 678 million, although this figure remained flat compared to the previous quarter [2][3] User Growth and Subscriptions - Ad-supported subscribers increased by 9% year-on-year to 423 million, but were flat quarter-over-quarter, while premium subscribers grew by 12% year-on-year and 2% quarter-over-quarter, totaling 268 million [3] - Spotify achieved its highest net additions in Q1 since 2020, with expectations to add 11 million net new MAUs in Q2, although this forecast carries substantial uncertainty [3] Future Aspirations - Ek articulated an ambitious goal of reaching one billion subscribers, indicating a belief in the vast potential of the streaming business beyond current operations [4] - The company is experiencing positive advertising trends and is expanding its capabilities, particularly in video content, which is seeing increased engagement [4] Financial Performance - Spotify's quarterly revenue grew by 15% year-on-year to €4.2 billion ($4.8 billion), aligning with Wall Street forecasts, while operating income was €509 million, falling short of guidance [5] - The company generated €534 million in free cash flow, but net profit decreased to €225 million from €326 million due to higher payroll taxes [5]

Core Insights - Spotify reported first-quarter operating income of 509 million euros, missing analyst estimates of 519.9 million euros, while revenue matched expectations at 4.2 billion euros [1] - Monthly active users (MAUs) grew to 678 million, consistent with the company's prior guidance [1] - The company issued a disappointing operating income forecast for the current quarter [1] Stock Performance - Spotify stock is down 4.8% to $568.90 before the market opens, following a 3.7% dip that ended a four-day winning streak [2] - The stock has increased by 106.4% year over year and 33.6% year to date [2] - The stock's recent rally lost momentum around the $625 level, which also capped a breakout attempt towards its all-time high of $652.18 [2] Options Market Sentiment - A shift in sentiment among options traders, who were more bullish than usual before earnings, may add pressure on the stock [3] - The 10-day call/put volume ratio for Spotify is 1.58, ranking higher than 97% of all readings from the past year [3] Analyst Outlook - The disappointing results may lead analysts to reassess their positive outlooks on Spotify [4] - Currently, 21 of 30 covering brokerages rate Spotify stock as a "buy" or better, with an average 12-month target price of $637.52, representing a 6.6% premium to its latest close [4]

Financial Data and Key Metrics Changes - Monthly Active Users (MAU) grew by 3 million to 678 million, with net subscriber additions of 5 million, reaching a total of 268 million, up 12% year on year [21] - Total revenue was €4.2 billion, growing 15% year on year on a constant currency basis [21] - Premium revenue rose 16% year on year on a constant currency basis, driven by continued subscriber growth and ARPU gains [22] - Gross margin came in at 31.6%, surpassing guidance by approximately 10 basis points and expanding about 400 basis points year on year [23] - Free cash flow was €34 million in the quarter, driven by growth in operating income and improving net working capital [24] Business Line Data and Key Metrics Changes - The advertising business delivered currency neutral growth of 5% year on year, with over 10,000 advertisers leveraging new tools, representing a 21% year over year increase [22][19] - The Spotify Partner Program for video podcasters launched in January, expanding to nine new markets and resulting in users spending 44% more time with video content overall [13] - Audiobooks continued to expand in premium, rolling out to more regions and driving higher user and author engagement [14] Market Data and Key Metrics Changes - Emerging markets drove two-thirds of the subscriber outperformance, with Latin America and Asia Pacific showing especially strong growth [15] - Developed markets also saw solid growth, indicating that Spotify is gaining market share in these regions [15] Company Strategy and Development Direction - The company is focusing on delivering the best possible experience to users and creators, with a commitment to accelerate innovation in 2025, termed the year of accelerated execution [11] - The strategy includes maximizing catalog offerings and enhancing user engagement through new features and content [55] - The company aims to maintain a strong balance sheet while prioritizing internal growth opportunities that can drive attractive returns [72] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the broader macro environment's uncertainty but expressed confidence in Spotify's long-term growth trajectory [6][8] - The company expects a stronger second half of 2025, with MAU net additions anticipated to be within the range of the past four years [90] - Management emphasized that the underlying performance remains strong, with high engagement and retention rates [50] Other Important Information - The company ended the quarter with €8 billion in cash and short-term investments, indicating a strong financial position [26] - The company is closely monitoring market conditions to adapt proactively to any changes in the macroeconomic environment [26] Q&A Session Summary Question: 2025 outlook and gross margin expectations - The company expects Q4 2025 gross margin to be up year over year and anticipates MAU net adds to be within the range of the past four years without requiring higher marketing spend [28][29] Question: Super fan product details - The company is working on higher tiers around new offerings, which will open new opportunities for user engagement and monetization [30][31] Question: AI integration in product development - AI is being leveraged for personalization and internal productivity, with expectations for accelerated product development [39] Question: Economics of podcaster payouts - The $100 million payout to podcasters aligns with expectations, and engagement metrics are key KPIs to monitor [41][44] Question: Advertising business performance - The advertising business is seeing strong internal tailwinds, with a unified ad stack providing more options for advertisers [48] Question: Subscriber growth despite reduced marketing spend - The company is focusing on enhancing the value to price ratio, which has led to strong subscriber growth without increased marketing [50][51] Question: Video content strategy - The company is adding video content based on creator demand, with ongoing improvements to the TV experience [56][58] Question: Financial impact from rights renewals - All financial impacts from recent rights renewals are reflected in the financial numbers as per contractual agreements [60] Question: Audiobooks growth strategy - The company sees significant opportunities in improving the user experience and expanding non-English content for international growth [62] Question: Pricing opportunities - The company believes there is significant pricing opportunity in the future, with a focus on maintaining a strong value to price ratio [63][68] Question: Capital allocation priorities - The company aims to prioritize growth opportunities while considering shareholder returns as excess capacity rises [72] Question: Revenue growth targets - The company remains focused on increasing consumer value, which will drive growth, although the path may not be linear [73][75] Question: Near-term noise in the market - The company does not foresee any major implications from the current macro environment, maintaining confidence in long-term growth [82] Question: Video podcast consumption trends - There has been a 44% year over year growth in time spent with video content, particularly among Gen Z [84] Question: Monthly Active Users (MAU) growth challenges - The company anticipates a rebound in MAU growth in the second half of the year, driven by product improvements and marketing adjustments [90]

Group 1 - Spotify paid over $100 million to podcast publishers and podcasters worldwide in Q1 2025 [1] - The payment includes all creators on the platform across various formats and agreements [1] - Notable podcasters benefiting from this include Joe Rogan, Alex Cooper, and Theo Von, who were among the top podcasts on Spotify globally in 2024 [1] Group 2 - Joe Rogan's exclusivity deal with Spotify has ended, but he signed a new deal last year worth up to $250 million, which includes revenue sharing and the ability to post on YouTube [2] - Alex Cooper signed a deal with SiriusXM in August, marking a shift from her previous exclusivity with Spotify [2]

Core Viewpoint - Spotify Technology S.A. is expected to report strong earnings growth in Q1 2025, with earnings per share estimated at $2.32, reflecting a 121% year-over-year increase, and revenues projected at $4.5 billion, indicating a 13.3% growth compared to the previous year [1]. Earnings Estimates - The Zacks Consensus Estimate for Q1 earnings has seen two upward revisions and one downward revision in the past 30 days, with a 1.3% increase in the 2024 earnings estimate during the same period [2]. - The current earnings estimates for Q1, Q2, E1, and F2 are $2.32, $2.44, $10.55, and $13.56 respectively, showing a positive trend in revisions over the last 60 days [3]. Earnings Surprise History - Spotify has a notable earnings surprise history, surpassing the Zacks Consensus Estimate in two of the last four quarters, with an average positive surprise of 22% [4]. Earnings Prediction Model - The current Earnings ESP for Spotify is -8.61%, and it holds a Zacks Rank of 3 (Hold), indicating that the model does not predict a definitive earnings beat this time [5][6]. Subscriber Growth - The growth in subscribers and monthly active users (MAU) is expected to positively impact both revenue and earnings, with total MAUs estimated at 678.3 million (10.3% year-over-year growth), ad-supported MAUs at 426.4 million (10% growth), and premium subscribers at 265.41 million (11% growth) [8]. Stock Performance - Spotify's stock has experienced significant price increases, rallying 35% year-to-date, 58% over the past six months, and 109% in the past year, indicating a strong upward trend [9]. Investment Considerations - The company's strong performance metrics are attributed to price hikes, a loyal consumer base, and cost reductions, which have contributed to growth in both top and bottom lines [10]. - The expectation is for another robust quarterly performance driven by subscriber gains and increases in average revenue per user (ARPU), which will enhance the company's financial position [11]. Long-term Outlook - While current growth prospects for Spotify appear strong, there may be a potential correction in the stock price, suggesting that investors might consider waiting for a more opportune moment to invest [12]. - The long-term growth potential of the company remains strong, making it a stock to monitor for future investment opportunities [14].

About this content About Emily Jarvie Emily began her career as a political journalist for Australian Community Media in Hobart, Tasmania. After she relocated to Toronto, Canada, she reported on business, legal, and scientific developments in the emerging psychedelics sector before joining Proactive in 2022. She brings a strong journalism background with her work featured in newspapers, magazines, and digital publications across Australia, Europe, and North America, including The Examiner, The Advocate, ...

Wall Street analysts expect Spotify (SPOT) to post quarterly earnings of $2.31 per share in its upcoming report, which indicates a year-over-year increase of 120%. Revenues are expected to be $4.47 billion, up 13.3% from the year-ago quarter. The current level reflects an upward revision of 2.7% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised their initial projections over this period. The combined asses ...

Company Performance - Spotify's stock closed at $574.25, reflecting a +1.99% change from the previous day's closing price, outperforming the S&P 500 which gained 0.13% [1] - Over the past month, Spotify's stock has decreased by 3.95%, which is better than the Computer and Technology sector's decline of 9.27% and the S&P 500's drop of 6.3% [1] Upcoming Financial Results - Spotify is set to announce its earnings on April 29, 2025, with an expected EPS of $2.31, indicating a 120% increase year-over-year [2] - Revenue for the upcoming quarter is projected to be $4.41 billion, representing an 11.64% increase compared to the same quarter last year [2] Annual Forecast - For the entire year, the Zacks Consensus Estimates predict earnings of $10.37 per share and revenue of $18.93 billion, reflecting increases of +74.29% and +11.68% respectively compared to the previous year [3] Analyst Projections - Recent shifts in analyst projections for Spotify are important as they often indicate changes in near-term business trends, with positive estimate revisions suggesting optimism about the company's outlook [4] Zacks Rank and Performance - The Zacks Rank system, which ranges from 1 (Strong Buy) to 5 (Strong Sell), has shown that 1 stocks have delivered an average annual return of +25% since 1988, with Spotify currently holding a Zacks Rank of 3 (Hold) [6] - Over the past month, the Zacks Consensus EPS estimate for Spotify has increased by 1.29% [6] Valuation Metrics - Spotify has a Forward P/E ratio of 54.32, which is a premium compared to the industry average Forward P/E of 24.35 [7] - The Internet - Software industry, part of the Computer and Technology sector, currently holds a Zacks Industry Rank of 72, placing it in the top 30% of over 250 industries [7][8]

One stock that might be an intriguing choice for investors right now is Spotify Technology S.A. (SPOT) . This is because this security in the Internet - Software space is seeing solid earnings estimate revision activity, and is in great company from a Zacks Industry Rank perspective.This is important because, often times, a rising tide will lift all boats in an industry, as there can be broad trends taking place in a segment that are boosting securities across the board. This is arguably taking place in the ...

In what feels like an increasingly common occurrence, a widespread Spotify outage on April 16 left millions of users without access to the popular music streaming platform, swiftly triggering rumours of a major ‘security hack.’Although the service was restored relatively quickly and the firm vehemently denied allegations of a cybersecurity incident, Spotify (NYSE: SPOT) stock experienced a deep plunge, falling approximately 3.89% from around $567 to roughly $545 during the height of the incident.Subsequentl ...