- Barclays saw Spotify Technology SA (NYSE:SPOT) report total MAUs, premium subs, and revenue in line with consensus.
- The 2Q revenue guidance also came in line, but gross margins and OI were missed primarily due to continued core operating improvements across music, podcast, and FX headwinds.
- Furthermore, these two factors will likely remain for the next few quarters before lapping/improving in 2023.
- Barclays remained Overweight, with a price target of $170 (61.8% upside).
- Positives for 1Q: Premium sub revenue was up 23% y/y ex-fx (up from 22% last Q), with both MAUs and ARPU coming ahead of expectations. ARPU growth benefited from a favorable product mix shift and is the last full Q of price increase benefit.
- Podcast metrics remained strong, with the share of overall consumption hours reaching a record high once again with consumption rates growing double-digits y/y.
- As a result, podcast revenue was likely up triple digits again y/y, while music ad-supported revenue also saw growth from increased impressions and double-digit growth in CPMs.
- However, ad revenue decelerated nearly 10pts sequentially and will likely remain ~30% y/y growth in 2Q (was trending mid-30s before Russia's invasion).
- Price Action: SPOT shares traded lower by 0.45% at $102.22 on the last check Friday.
- Photo by Photo Mix from Pixabay
