Spotify (NYSE:SPOT) Delivers Robust Q4 Performance
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Spotify (NYSE:SPOT) Delivers Robust Q4 Performance

Story Highlights

Spotify’s fourth-quarter results were marked by robust user additions, improving margins, and healthy cash flow generation.

Spotify (NYSE:SPOT) shares surged in the early session today after the audio streaming platform’s fourth-quarter revenue jumped by 16% year-over-year to €3.7 billion. Further, its net loss per share narrowed to €0.36 from €1.40 in the year-ago period.

During the quarter, total monthly active users (MAUs) increased by 23% to 602 million, and the number of premium subscribers ticked up by 15% to 236 million. Notably, ad-supported MAUs rose by a healthy 28% to 379 million.

The company’s gross margin expanded by 140 basis points to 26.7%. Further, lower marketing and personnel costs helped narrow the operating loss to €75 million from €231 million in the year-ago period. Additionally, free cash flow for the quarter stood at €396 million.

For the upcoming quarter, Spotify expects to add 16 million net new MAUs and 3 million net new premium subscribers. The company also anticipates €180 million in operating income on revenue of €3.6 billion.

Is SPOT a Good Stock to Buy?

Overall, the Street has a Moderate Buy consensus rating on Spotify, and the average SPOT price target of $236.47 implies a modest 5.9% potential upside in the stock. With the rising adoption of audio streaming, shares of the company have surged by nearly 82% over the past year.

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