Spotify: Solid Results, Big Tax Bill

1 month ago 11

Lou Whiteman, The Motley Fool

Tue, Apr 29, 2025, 6:43 AM 3 min read


Revenue	3.6 cardinal euros	4.2 cardinal euros	16%	Met
Earnings per share	0.97 euros	1.07 euros	10%	Missed
Premium subscribers	239 million	268 million	12%	Beat
Free currency flow	207 cardinal euros	534 cardinal euros	158%	n/a

Spotify's 2024 momentum continued successful the archetypal 3 months of 2025, with the institution reporting progressive monthly users up 10% to 678 cardinal and premium subscribers up 12% to 268 million. It translated into coagulated 16% year-over-year gross maturation and 10% net maturation for the quarter.

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Alas, immoderate of Spotify's occurrence is taking a toll connected results. Spotify's EPS effect came successful importantly beneath Wall Street expectations owed to higher-than-expected costs. The culprit? About 76 cardinal euros successful employment taxes tied to the 106% summation successful the company's stock terms implicit the past year.

Spotify said those alleged societal charges were astir 58 cardinal euros supra forecast.

Operating metrics for the institution proceed to look strong. Spotify's mean gross per idiosyncratic for its subscription businesses was up 4% to 4.73 euros, fueled by terms increases. And ad-supported gross was up 8%. Overall gross borderline came successful astatine 31.6%, up 400 ground points from a twelvemonth ago.

The beardown profitability helped Spotify much than treble escaped currency travel successful the 4th to 534 cardinal euros.

The net miss appears to beryllium weighing connected investors successful aboriginal greeting trading. Share prices of Spotify were down 6% pursuing the merchandise of net but up of the unfastened of regular trading connected the New York Stock Exchange.

Spotify turned a batch of heads successful 2024 erstwhile it was capable to usage the benefits of its monolithic standard and pricing powerfulness to make its archetypal afloat twelvemonth of profitability. The institution said it was watching "headwinds," including a imaginable slowdown successful user spending and volatile overseas currency speech rates, but inactive sees continued maturation successful 2025.

The institution expects full users to turn to 689 cardinal successful the existent quarter, which is somewhat beneath Wall Street expectations, but for premium subscribers to turn to 273 million, which would beryllium somewhat amended than what analysts expected.

The bull lawsuit from present is that Spotify has a sticky merchandise and is simply a comparatively affordable "splurge" erstwhile times are tough. Spotify's quarter, contempt the tax-related turbulence, provided nary crushed to interest that the bull lawsuit is successful doubt.