The stock has come a long way in a short period of time. After tanking in 2022 along with so many tech stocks, SPOT shares have climbed almost 6-fold since.
Category Archives: Spotify
User and subscriber growth continued to show impressive strength. MAUs grew 26% y/y to 574 million, adding 23 million sequentially and 2 million ahead of guidance. That was the company’s second-largest quarter ever for MAU net adds. Premium subs grew 16% y/y to 226 million, adding 6 million sequentially and 2 million ahead of guidance. Fourth-quarter guidance calls for more robust growth with MAUs reaching 601 million and Premium subs reaching 235 million. The long-term 1 billion MAU figure that has been thrown around for a long time no longer feels like a big stretch anymore.
I shared some qualitative thoughts about Spotify earlier this month in Spotify: A Compounding Effect. In this post, I’ll focus on the quantitative as it relates to valuation.
From a long-term investor’s perspective, Spotify’s first-quarter report was really strong. I’m not talking about the backward-looking financial metrics—gross margin is still ~25%, operating expenses are still too high, and operating income is still negative. But a snapshot in time is far less important than where the puck is going. And on the margin, it feels like we’re on the cusp of something really great—accelerating user growth, improving gross margins, improving operating expense leverage, and with any luck, a long overdue price increase in major markets that comes with a more favorable revenue split with the labels. With a multiyear perspective in mind, here’s what I found most important.
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Some thoughts on Spotify’s 2022 Investor Day
Some thoughts on Spotify after its first-quarter results
Some thoughts on Spotify after its fourth quarter
My thoughts on Spotify after its third quarter.
My thoughts on Spotify after its second quarter.