Spotify 2.0
Two years ago, I did a deep dive into Spotify’s financials. At the time, the audio pioneer was starting to put together a profitable business model. Below are the latest financials after Spotify reported its earnings for Q2 2024.
Let’s look at Spotify by the numbers, Q2 2024.
TL;DR
Despite fierce competition from well-funded tech giants, Spotify has firmly established itself as a profitable and innovative leader in the audio market. After a dip in November 2022, the company's stock price has sharply risen.
Financials
Revenue is the value of all sales of goods and services a company recognizes in a period. Gross margins are a company’s sales minus its cost of goods sold (COGS) expressed as a percentage of sales.
- Free cash flow of €490 million, an all-time high
- Operating income of €266 million, an all-time high
- Total Revenue of €3.8 billion, up 20% year-over-year
- Premium Revenue of €3.35 billion, up 21% year-over-year
- Ad-Supported Revenue up 13% year-over-year
- Gross Margin of 29.2%, an all-time high
Operations
Monthly active users (MAUs), considered a key metric for modern software companies, track the number of users who have engaged with a service within the past 30 days.
- Total MAUs at 626 million, up 14% year-over-year
- Premium Subscribers up 12%
- Total workforce of 7,372 employees
- Operating expenses down 16% year-over-year
Stock Price
While Spotify’s year-over-year user and financial results look impressive, the company’s stock price surged recently. From a low of $71 in November 2022, it currently sits at $336 in July 2024.
Forward Guidance
- Total MAUs: 639 million
- Total Premium Subscribers: 251 million
- Total Revenue: €4 billion
- Gross Margin: 30.2%
- Operating Profit/Loss: €405 million
