Music Giant Spotify's Q1 Surprise: Investors Cheer Premium Subscriber Growth And Profit Bump
Portfolio Pulse from Anusuya Lahiri
Spotify Technology SA (NYSE:SPOT) reported a 20% year-on-year revenue growth for Q1 2024, reaching €3.64 billion ($3.95 billion), surpassing the consensus of $3.85 billion. EPS was €0.97 ($1.05), beating the consensus of $0.70. Premium revenue and subscribers grew by 20% and 14% respectively, with ARPU increasing by 5%. However, total MAUs of 615 million fell short of guidance by 3 million. The company cited moderated marketing activity and recent layoffs as factors. Ad-supported MAUs and revenue saw significant growth. Gross margin improvements were noted across the board, with operating income hitting a new quarterly high of €168 million. Spotify expects Q2 revenue of €3.8 billion and 631 million MAUs. SPOT shares rose 8.27% in premarket trading. Investors can also gain exposure through Global X Social Media ETF (NASDAQ:SOCL) and ProShares On-Demand ETF (NYSE:OND).
April 23, 2024 | 12:33 pm
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POSITIVE IMPACT
ProShares On-Demand ETF (OND) may benefit from Spotify's Q1 2024 earnings beat and stock price rise, given its investment in Spotify.
OND, holding Spotify, is likely to experience a positive short-term impact from Spotify's earnings beat and stock appreciation. The effect on OND will depend on the weight of SPOT within the ETF's portfolio.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Global X Social Media ETF (SOCL) includes Spotify in its holdings, potentially benefiting from Spotify's strong Q1 2024 performance and stock price increase.
Given SOCL's exposure to Spotify, the ETF may see positive short-term movement as a result of Spotify's earnings beat and subsequent stock price increase. However, the impact may be diluted due to the diversified nature of the ETF.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 70
POSITIVE IMPACT
Spotify reported strong Q1 2024 results with revenue and EPS beating expectations, premium subscriber growth, and improved margins. However, total MAUs fell short of guidance.
The positive earnings report and the significant premarket stock price increase indicate a strong short-term bullish sentiment for SPOT. The revenue growth, EPS beat, and subscriber growth are key drivers, despite the slight miss on MAUs.
CONFIDENCE 90
IMPORTANCE 95
RELEVANCE 100