Shares of Spotify Technology SA SPOT climbed in early trading on Wednesday, after the company reported its second-quarter results. The results came amid an exciting earnings season. Here are some key analyst takeaways. Bank of America analyst Jessica Reif Ehrlich reiterated a Buy rating, while raising the price target from $380 to $430. Goldman Sachs analyst Eric Sheridan upgraded the rating from Neutral to Buy, while lifting the price target from $320 to $425. JPMorgan analyst Doug Anmuth reiterated an Ove ...

Financial Data and Key Metrics Changes - The company added 7 million net new subscribers in the quarter, exceeding forecasts by 1 million [8] - Total revenue grew 21% year-on-year on a constant currency basis to €3.8 billion [8] - Operating income reached a record €266 million, supported by gross profit strength and lower operating expenses [20] - Free cash flow was a record €490 million in the quarter, driven by an improving operating income profile [20] - Gross margin came in at a Q2 record of 29.2%, surpassing guidance by 110 basis points [103] Business Line Data and Key Metrics Changes - Premium ARPU growth accelerated by 300 basis points to 10% year-on-year on a currency-neutral basis [8] - The advertising business saw currency-neutral growth of 12% year-on-year, although performance was slower relative to Q1 [8] - The company is experiencing a slight moderation in ARPU growth for Q3, expected to be in the 100 to 200 basis point range [9] Market Data and Key Metrics Changes - The company is focusing on developing markets for user acquisition, which presents challenges in engagement and conversion to paid subscriptions [6] - In developed markets, the company sees strong penetration and broad awareness, allowing for strong revenue growth even as these markets mature [45] Company Strategy and Development Direction - The company aims to transform its business with a focus on monetization and has multiple growth options available [7] - There is a strategic emphasis on improving marketing effectiveness and enhancing the free product pipeline to boost engagement and retention [101] - The company is exploring new subscription plans and diversifying its offerings to attract different consumer segments [111] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in overcoming the current MAU growth challenges, viewing it as a matter of "when" rather than "if" [50] - The company is optimistic about future growth opportunities, particularly in developing markets and through enhanced product offerings [64] - Management highlighted the importance of creating win-win scenarios for both creators and consumers to drive long-term value [80] Other Important Information - The company is monitoring the impact of recent price increases on subscriber retention, with early signs indicating better-than-expected cancellation rates [87] - The company is committed to maintaining healthy relationships with the music industry, focusing on mutual growth rather than a zero-sum game [32] Q&A Session All Questions and Answers Question: What actions are being taken to drive more MAU growth? - The company is optimizing marketing in developing markets and enhancing product offerings to improve engagement and retention [117] Question: How has podcast engagement changed on Spotify? - Engagement on podcasts remains healthy, with video podcasts showing even higher engagement levels compared to audio-only content [120] Question: Can you provide an update on your relationship with the labels? - The company maintains a win-win perspective with the music industry, focusing on increasing payouts and fostering healthy growth [59]

Ahead of this earnings release, the estimate revisions trend for Spotify: favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. While Spotify has outperformed the market so far this year, the question that ...

| --- | --- | |------------------------|--------------| | | Exhibit 99.1 | | Spotify Q2 2024 Update | | | July 23rd, 2024 | | | --- | --- | --- | |--------------------|----------------------|-------| | | Executive Summary | p.03 | | | Key Highlights | p.04 | | | Financial Summary | p.06 | | Table of Contents | MAUs & Subscribers | p.13 | | | Product & Platform | p.16 | | | Outlook | p.20 | | Spotify | Financial Statements | p.23 | Executive Summary | --- | --- | --- | --- | --- | --- | --- | |-------------- ...

Two estimates for the to-be-reported quarter moved south over the past 30 days versus no northward revisions. Over the same period, the Zacks Consensus Estimate for 2024 earnings has decreased 1.8%. Our proven model doesn't conclusively predict an earnings beat for Spotify this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that's not the case here. You can uncover the best stocks to buy or sell before ...

Spotify (SPOT) has been on a downward spiral lately with significant selling pressure. After declining 7.6% over the past four weeks, the stock looks well positioned for a trend reversal as it is now in oversold territory and there is strong agreement among Wall Street analysts that the company will report better earnings than they predicted earlier. We use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillat ...

Spotify (NYSE:SPOT) is today the winner of the music streaming segment. Even with a number of relevant competitors trying to succeed, so far, the most successful is Spotify, due to its creation of a more user-focused platform, with personalization and the like. Showing good progress in recent quarters, Spotify's fundamentals are becoming clearer, making it possible to project results where a return for the shareholder is already attractive. But even with some moats and being the leader at the moment, this " ...

About this content 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, The Canberra Times, an ...

At the same time, the small-cap Russell 2000 has soared as Wall Street prices in the start of Fed rate cuts in September. Increased market breadth is a positive sign for investors. Zacks Rank #1 (Strong Buy) stocks outperform the market in both good and bad times. However, there are over 200 stocks that earn a Zacks Rank #1 at any given time. Clearly, there are only three items on this screen. But together, these three filters can result in some impressive returns. • % Change (Q1) Est. over 4 Weeks greater ...

Investment Rating - The report assigns a "Buy" rating to Spotify with an initial target price of US$378.52, compared to the current share price of US$296.78 [23][24]. Core Insights - Spotify is positioned as the leading audio and podcast streaming service globally, utilizing a freemium business model that combines free and paid services. This model allows users to access basic services for free while offering premium features through subscriptions. The audio streaming industry is mature in regions like the US and Europe, but there remains significant growth potential in developing countries such as India [6][24]. - The report highlights Spotify's market share growth in India, increasing from 10% in 2020 to 26% in 2023, surpassing competitors like JioSaavn and Apple Music. This growth is attributed to Spotify's reputation, technological expertise, and focus on local and Hindi music, appealing to the 15-30 age demographic [21][24][116]. - Spotify's revenue from podcasts has shown substantial growth, increasing from €2.95 billion in 2016 to €16.81 billion in 2023, with a compound annual growth rate (CAGR) of 28.2%. The share of podcast revenue in total revenue has also risen from 10% to 12.7% during the same period [24][123]. Summary by Sections Investment Overview - The report emphasizes Spotify's potential for growth and profitability, projecting earnings per share (EPS) of €3.903, €6.439, and €9.487 for 2024, 2025, and 2026 respectively, with a forecasted transition to profitability starting in 2024 [24][46]. Financial Performance - Spotify's total revenue is expected to grow from €13.247 billion in 2023 to €15.746 billion in 2024, with a net profit forecast of €777 million in 2024, marking a significant turnaround from previous losses [15][24]. Market Expansion - The report discusses Spotify's strategic expansion into the Indian market, leveraging its experience from entering similar markets like Brazil. The focus on local content and partnerships with telecom providers has been crucial for gaining market share [29][106][110]. Competitive Positioning - Spotify's leadership, particularly by co-founders Daniel Ek and Martin Lorentzon, has been instrumental in shaping the company's competitive edge and market strategy. Their focus on innovation and understanding of consumer digital experiences has positioned Spotify favorably in the streaming landscape [119][120].