Consumer Discretionary

The following is a summary of the Spotify Technology S.A. (SPOT) Q1 2024 Earnings Call Transcript: Financial Performance: Spotify’s Q1 revenue increased by 21% year-on-year to EUR3.6 billion on a constant currency basis. Q1 saw a record gross margin of 27.6%, surpassing predictions by 121 basis points. Q1’s operating income reached a new record of EUR168 million, thanks to a strong gross profit and lower operational expenses. Spotify had positive free cash flow, reaching EUR207 million. Revenue for Q2 is anticipated to increase by over 22% year-on-year, potentially reaching the EUR3.8 billion mark. 20% of the revenue growth was contributed by the premium product service, due in part to price increases. Gross margin expanded significantly in this quarter, with music improvements being the significant driver alongside the growth of the marketplace business. Business Progress: Q1 experienced slower user growth due to workforce reduction impact, slower start of the year, and […]

Goldman Sachs analyst Eric Sheridan had a Neutral rating on Spotify Technology SA (NYSE:SPOT) with a price target of $277. Spotify reported fiscal first-quarter 2024 revenue growth of 20% year-on-year to $3.95 billion, beating the consensus of $3.85 billion. EPS of $1.05 beat the consensus of $0.70. The stock price jumped Tuesday after the print. The analyst expects Spotify to have a positive market reaction to its first-quarter 2024 earnings report (including its forward second-quarter 2024 commentary) as the company reported roughly in-line subscriber and revenue performance across its businesses with some headwinds to forward revenue and subscriber momentum in the forward forecast. In addition (and likely the more significant component of the stock reaction to this earnings report), he would focus on the positive operating momentum in both gross margins and operating margins on a mix of improved music and podcast trends with some headwind from audiobook costs operating margins benefiting from lower personnel

Spotify (SPOT) is seen delivering in-line Q1 results on Tuesday, while profitability will be a “key focus” for investors after the recent job cuts and as podcasts are near an inflection point to profitability, Macquarie Equity Research said in a note emailed Friday. Macquarie expects the company to report Q1 revenue of 3.6 billion euros ($3.82 billion) “driven by a 10% price hike in the US (28% of premium sub base) and improving ad market trends that should support growth in ad supported revenues.” “Podcast margins were near breakeven in 4Q23, and [management] commentary signaled that margins are likely to positively inflect and drive profitability through 2024,” said Macquarie analysts Tim Nollen and Ross Compton. “Podcasting has an inherent fixed cost base that implies operating leverage across the content slate. This is in contrast to music where each and every stream warrants a variable cost to the label,” they said.