Q4 2024 Update February 4th, 2025 Table of Contents | Executive Summary | p.03 | | --- | --- | | Key Highlights | p.04 | | Financial Summary | p.06 | | MAUs & Subscribers | p.13 | | Product & Platform | p.16 | | Outlook | p.21 | Financial Statements p.24 2 Executive Summary | USER & FINANCIAL SUMMARY | Q4 2023 | Q3 2024 | Q4 2024 | Y/Y | Q/Q | | --- | --- | --- | --- | --- | --- | | USERS (M) | | | | | | | Total Monthly Active Users ("MAUs") | 602 | 640 | 675 | 12% | 5% | | Premium Subscribers | 236 | 252 | ...

Music streaming name Spotify Technology SA (NYSE:SPOT) is preparing for its latest quarterly earnings report, due out before the open Tuesday, February 4. The stock has a bright earnings history, finishing its last five post-earnings sessions higher and closing only one next-day session lower over the past two years. The stock has already been outperforming on the charts recently, too, hitting a record high of $560.36 just last session before turning lower. Today, the shares were last seen up 0.4% at $550.5 ...

Core Insights - Spotify Technology SA is set to report its fourth-quarter earnings, with Wall Street expecting an EPS of $2.06 and revenues of $4.15 billion [1] - The stock has experienced a significant increase of 145.71% over the past year and 19.83% year-to-date [1] Stock Performance - SPOT stock is currently in a strongly bullish trend, trading at $548.55, above key exponential moving averages (EMAs) for five-day, 20-day, and 50-day periods [2] - The stock remains above its eight-day simple moving average (SMA) of $523.47, 20-day SMA of $493.03, and 50-day SMA of $480.44, indicating short- and medium-term bullish momentum [2] - Long-term strength is confirmed as SPOT stock is well above its 200-day SMA of $371.38, indicating an extended uptrend [2] Technical Indicators - Momentum indicators show both strength and caution, with the Moving Average Convergence Divergence (MACD) at 20.53 supporting continued bullish momentum [3] - The Relative Strength Index (RSI) at 76.7 suggests that SPOT stock is overbought, indicating a potential pullback [3] - Investors are advised to watch for consolidation or correction before considering new positions, as profit-taking could occur at current levels [3] Analyst Ratings - The consensus analyst rating for Spotify stock is currently a Buy, with a price target of $438.39 [4] - Recent analyst ratings from Keybanc, Macquarie, and Cantor Fitzgerald imply a 3.28% upside for Spotify stock, with a price target of $560 [4] - As of the latest check, Spotify stock was up 0.7% at $552.45 [4]

The upcoming report from Spotify (SPOT) is expected to reveal quarterly earnings of $1.92 per share, indicating an increase of 592.3% compared to the year-ago period. Analysts forecast revenues of $4.36 billion, representing an increase of 10.3% year over year.Over the last 30 days, there has been a downward revision of 1.6% in the consensus EPS estimate for the quarter, leading to its current level. This signifies the covering analysts' collective reconsideration of their initial forecasts over the course ...

Core Insights - The article discusses the investment position of Parkev Tatevosian, CFA, and his affiliation with The Motley Fool, which recommends Spotify Technology [1] Company Analysis - The Motley Fool has positions in and recommends Spotify Technology, indicating a positive outlook on the company's future performance [1]

Core Viewpoint - Spotify Technology S.A. is expected to report its fourth-quarter 2024 results on February 4, with earnings estimated at $1.92 per share, reflecting a year-over-year growth of 592.3%, and revenues projected at $4.35 billion, indicating a 10% year-over-year increase [1] Earnings Estimates - The Zacks Consensus Estimate for fourth-quarter 2024 earnings has decreased by 3% over the past 30 days, with two downward revisions and one upward revision [2] - Spotify's earnings surprise history shows that it lagged the Zacks Consensus Estimate in two of the last four quarters, with an average negative surprise of 74.4% [2] Earnings Prediction Model - The current model does not predict an earnings beat for Spotify, as it has an Earnings ESP of -16.45% and a Zacks Rank of 3 (Hold) [3] Growth Factors - The growth in subscribers and monthly active users (MAU) is expected to positively impact both the top and bottom lines in the upcoming quarter [4] - The consensus estimate for total MAUs is 665.3 million, reflecting a year-over-year growth of 10.5%, while ad-supported MAUs are estimated at 420.2 million, indicating an 11% increase [5] Price Dynamics - Spotify's stock has increased significantly, with a 150% rise over the past year, 57% over the past six months, and 20.4% in the last month, suggesting a rally phase [6] Conclusion on Investment - While Spotify's growth prospects appear strong, potential investors may consider waiting for a correction, as the stock does not seem positioned for an earnings beat, although its long-term growth potential remains compelling [7]

Core Viewpoint - Spotify's stock has surged approximately 140% over the last 12 months and over 540% since the beginning of 2023, raising questions about its future performance [1] Group 1: Recent Performance and Turnaround - Spotify's stock experienced a significant decline of over 80% in 2021 and 2022 due to mounting losses and a general downturn in growth stocks [2] - In early 2023, CEO Daniel Ek implemented cost-cutting measures, reducing the workforce by about 17%, which helped refocus the company on music streaming and control costs [3] - After reaching a multiyear low operating margin of -7.8% in mid-2023, Spotify's operating margin has improved to 11.4%, contributing to the stock's rise to all-time highs [4] Group 2: Revenue Growth and Business Model - Spotify has averaged quarterly revenue growth of nearly 18% over the last five years, with recent quarters exceeding this average [7] - Approximately 88% of Spotify's revenue comes from premium subscriptions, with the company also generating revenue from ads and converting ad-supported listeners into subscribers [9] - User growth is a key indicator for future revenue, as an increase in ad-supported monthly active users (MAUs) leads to higher conversion rates to paid subscriptions [10] Group 3: Future Outlook - In the most recent quarter ending September 30, 2024, Spotify reported an 11% increase in ad-supported MAUs and a 12% increase in premium subscribers [11] - Analysts project Spotify's sales to grow by 15% in 2025, with earnings expected to rise by nearly 60% [12] - The company is viewed as having significant growth potential, with expectations for its stock to outperform the market over the next year [13]

Core Insights - Spotify is exploring new growth opportunities by potentially introducing price tiers aimed at superfans, which could enhance revenue and profit margins [1] Revenue Growth Strategy - The company has historically driven revenue growth through subscriber additions and price increases [1] - The introduction of price tiers for superfans is expected to further boost Spotify's revenue and profits [1]

Core Viewpoint - Wall Street anticipates a year-over-year increase in Spotify's earnings driven by higher revenues, with a focus on how actual results will compare to estimates [1][2]. Earnings Expectations - Spotify is expected to report quarterly earnings of $1.91 per share, reflecting a significant year-over-year increase of +589.7% [3]. - Revenue projections stand at $4.35 billion, indicating a 10% increase from the same quarter last year [3]. Estimate Revisions - The consensus EPS estimate has been revised down by 1.58% over the last 30 days, indicating a reassessment by analysts [4]. - A negative Earnings ESP of -14.49% suggests a bearish outlook from analysts regarding Spotify's earnings prospects [10][11]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive or negative reading can predict earnings deviations, but its predictive power is stronger for positive readings [7][8]. - Spotify's current Zacks Rank is 3, which complicates the prediction of an earnings beat [11]. Historical Performance - In the last reported quarter, Spotify was expected to earn $1.75 per share but only achieved $1.59, resulting in a surprise of -9.14% [12]. - Over the past four quarters, Spotify has beaten consensus EPS estimates twice [13]. Conclusion - Despite the potential for an earnings beat, various factors can influence stock movement, making it essential to consider other elements beyond earnings results [14][16].

Group 1: Company Financials and Payouts - Spotify paid $10 billion to the music industry in the last year and has given nearly $60 billion in total payouts since its inception [1] - More than 10,000 artists earn over $100,000 per year from streaming revenues, compared to over 10,000 artists earning more than $10,000 per year in 2014 [3] Group 2: Market Context and User Base - There are over 500 million paying music streaming customers worldwide, with Spotify having over 252 million subscribers as of Q3 2024 [2] - More than 60% of Spotify's current users are on its ad-supported free tier [2] Group 3: Industry Trends and Competition - Per-stream rates for independent artists are stabilizing, but Spotify has the lowest payout at $3.0 per 1,000 streams, compared to Amazon Music, Apple Music, and YouTube which pay $8.8, $6.2, and $4.8 respectively [4] - An average of 99,000 tracks are uploaded to streaming platforms daily, with global streams reaching 4.8 trillion, marking a 14% year-on-year increase [7] Group 4: Artist Engagement and Streaming Dynamics - Spotify's Discover Mode allows artists to enhance song visibility through algorithms while accepting a pay cut, leading to a situation where artists need significantly more streams to earn the same amount of money [6]