Why Stop At $400? Spotify Stock Tops $465 Per Share Following Q3 Earnings Release — Execs Target ‘First Full Year of Profitability’

Spotify stock jumped to $465 per share following the release of the streaming platform’s Q3 2024 earnings report.

Why stop at $400 per share? Spotify stock (NYSE: SPOT) is surging following the release of the company’s Q3 2024 earnings report – including a prediction that 2024 will go down as the business’s “first full year of profitability.”

At the time of writing, less than one week after shares managed to crack a then-record price of $400 each, SPOT was positioned at an even $465. That marks a roughly 146% spike since 2024’s beginning and a close to 172% jump since mid-November 2023.

As things stand, operational recalibrations, programming cutbacks, and multiple layoff rounds have, in keeping with assurances from CEO Daniel Ek and others, evidently set the stage for consistent profitability at Spotify. Revenue totaled $4.22 billion (€3.99 billion) during the third quarter, when operating income topped $480.58 million (€454 million).

Meanwhile, continued user and especially subscriber growth is likewise fueling Spotify’s performance; the platform’s paid userbase grew 12% YoY to 252 million during Q3, generating, thanks to price increases and more, a cool $3.73 billion/€3.52 billion (up 21% YoY).

Additionally, Spotify reported $499.36 million/€472 million in third-quarter ad-supported revenue – reflecting a 6% YoY boost. Notably, a full 55% of Spotify monthly active users now reside outside Europe and North America, which continue to account for the majority (65%) of subscribers.

Before Spotify’s anticipated “first full year of profitability” is in the books, company brass are banking on adding eight million subscribers (260 million total), hitting $4.34 billion/€4.1 billion in revenue, and surpassing $509.28 million/€481 million in operating income for 2024’s fourth quarter.

Plus, Spotify took the opportunity to double down on the aggressive forecast it introduced back in 2022 – including $100 billion in annual revenue by 2032. The business’s Q3 2024 financials, Ek said during the earnings call, mean Spotify is “slightly ahead of schedule” when it comes to the 2032 timetable.

Needless to say, the ambitious forecast depends in large part on continued subscriber gains. But Spotify is also spearheading an advertising buildout and has further confirmed a higher-priced “Deluxe” tier. Once again during the call, Ek appeared to underscore Spotify’s superfan objectives by highlighting upcoming “innovative ways to connect artists and fans like never before.”

Next, Spotify’s diversification beyond music, on top of being a bit more measured, is no longer limited to podcasts or even audiobooks. (Ek discussed audiobook usage during the call as well, communicating that “in the U.S., among the audiobook users, we’re seeing more than five hours more consumption [than the non-audiobook average] for Spotify users.”)

We’ve charted Spotify’s ongoing video embrace – including music videos, video podcasts, television shows, comedy specials, and now creator content – for some time. And per Ek, “the next few days” will bring multiple “announcements that I’m sure will be of interest to you related to our expansion of video on the platform.”

Link to the source article – https://www.digitalmusicnews.com/2024/11/13/spotify-stock-q3-2024-earnings/

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