Spotify Technology SA (SPOT) reported strong financial performance for the first quarter of its fiscal 2024, buoyed by robust growth in its premium segment and a rise in average revenue per user (ARPU). Total revenue climbed by an impressive 20% year-over-year to $3.95 billion, exceeding consensus estimates of $3.85 billion. Earnings per share (EPS) of $1.05 also surpassed analyst expectations of 70 cents. Premium revenue experienced an equally impressive 20% year-over-year growth, reaching 3.25 billion euros. This surge was driven by a substantial increase in subscribers. Total Monthly Active Users (MAUs) grew by 19% year-over-year, reaching 615 million, although it fell short of the company’s projected figure by 3 million. Ad-supported MAUs witnessed a significant 22% year-over-year growth, reaching 388 million, reflecting the growing popularity of the platform’s free, ad-supported tier. Premium Subscribers saw a 14% year-over-year increase, expanding to 239 million, demonstrating the ongoing strength of the company’s paid subscription model. Spotify maintains a solid financial position, with 4.7 billion euros in cash and equivalents and generating 207 million euros in free cash flow. Looking ahead, Spotify anticipates second-quarter revenue of 3.8 billion euros and total MAUs of 631 million. The company’s positive earnings report has been met with optimism by analysts, with several issuing price target increases. Pivotal Research raised its target from $390 to $400, while Benchmark and Rosenblatt increased their targets to $375 and $396, respectively. All three analysts maintained their ‘Buy’ ratings, reflecting their confidence in Spotify’s growth prospects.
Spotify Technology Q1 2024 Earnings Surpass Expectations
