Spotify Earnings Preview: Q4 2023
Headline:
Spotify (SPOT) to Announce Fiscal Fourth Quarter Results on Tuesday Pre-Market
Key Metrics to Watch:
* Revenue: €4.16 billion (consensus) vs. €3.67 billion in Q4 2023
* Adjusted Earnings Per Share: €1.89 (consensus) vs. adjusted loss of €0.36 in Q4 2023
* Total Monthly Active Users (MAUs): 665 million (consensus) vs. 602 million in Q4 2023
* Premium Subscribers: 260 million (consensus) vs. 236 million in Q4 2023
Recent Performance and Strategic Shifts:
* Shares have soared to all-time highs, up 150% over the past year.
* Company remains on track for full-year profitability for the first time.
* Intense business overhaul, including layoffs, C-suite changes, and shift away from podcasts.
Gross Margin and Expansion Prospects:
* Spotify's gross margin increased to 31.1% in the recent quarter.
* Wall Street projects margins to expand to 31.8% in Q4.
* Analysts expect the pace of margin expansion to slow in 2025.
Growth Catalysts and New Features:
* Price hikes and launch of new tiers for superfans.
* Ramp-up of advertising with Spotify's own exchange.
* Improved monetization and growth in verticals beyond music.
Universal Music Group Deal:
* Multiyear distribution agreement with UMG announced last week.
* Deal includes compensation for recorded songs and publishing rights.
* Access to upcoming releases and specialized products like video.
* Analysts seeking clarity on the economic impact of the deal.
Analyst Ratings and Price Targets:
* Median price target: $517 (consensus)
* 29 Buy ratings, 9 Holds, 3 Sells