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$98.8B
Market Cap
47.1
P/E
PEG
39.0%
ROCE
31.9%
ROE
0.05
D/E
12.8%
OPM
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Currency-adjusted total returns for SPOT including FX impact
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Ratio Health
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By Category
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About

Spotify Technology S.A., together with its subsidiaries, provides audio streaming subscription services worldwide.

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⭐ Superinvestors Holding SPOT
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Manager Shares Value % of Fund Period
Cathie Wood ARK Investment Management 67.8K $32.9M 0.26% Mar 2026

SEC Form 13F data. 45-day lag from quarter end.

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Good quarter Investor Presentation One-Pager? Q1 2026
Revenue
€4.5B
+14% YoY
Operating Income
€715M
+40% YoY
Operating Margin
15.8%
+3.7pp YoY
Net Income
€721M
+220% YoY
What Went Right
  • MAU beat guidance by 2M, reaching 761M (+12% YoY)
  • Gross margin hit 33%, second‑highest ever, up 133bp YoY
  • AI DJ now used by 94M subscribers; SongDNA reached 52M users in four weeks
What to Watch
  • Ad revenue growth slowed to ~3% YoY due to legacy direct‑sales choppiness
  • OpEx elevated from AI compute and marketing spend; expected to stay high for 1–2 quarters
  • Q2 gross margin guide of 33.1% is only modestly above Q1, with variability flagged
Management Guidance
  • Q2 revenue expected ~€4.8B, +15% YoY
  • Q2 operating income guided to €630M
  • Full‑year gross margin and operating margin expected to improve; meaningful free cash flow growth in 2026
Investor Lens
The thesis strengthens: Spotify is simultaneously growing users, expanding margins, and reinvesting in AI‑driven features that boost retention. The ad‑tech rebuild is still a near‑term drag, but biddable revenue now >30% of ad sales and expected to accelerate in H2. Management’s disciplined headcount control offsets higher compute spend, and the upcoming Investor Day should clarify the next growth chapter. Long‑term, the playbook of scaling engagement across music, podcasts, audiobooks, and now fitness creates multiple monetisation levers.
From investor presentation · AI-generated analysis · Not investment advice
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📈 STRONG Solid beat on MAU and margin; AI investments paying off
Revenue
Total revenue was €4.5B, up 14% YoY (11% in Q4). Premium revenue rose ~15% on subscriber growth and 5.7% ARPA expansion. Ad‑supported revenue grew only ~3% due to ongoing transition to biddable buying, though biddable now represents over one‑third of ad revenue.
Profitability
Net income surged to €721M from €225M a year ago, a 220% increase. EPS (basic) came in at €3.50 vs. €1.10 prior year. Operating income was €715M, well above the guided €660M, helped by favourable social charges and gross margin outperformance.
Margins
Gross margin of 33% beat guidance by ~20bp and expanded 133bp YoY, driven by core strength and revenue mix. Operating margin hit 15.8%, a record Q1. The sequential Q2 guide of 33.1% gross margin reflects reinvestment, but full‑year margin improvement is reiterated.
Balance Sheet
Free cash flow was €824M, unusually strong due to timing; some reversal expected in Q2. The company ended Q1 with €8.8B cash and no debt besides lease liabilities. It also repurchased $361M in shares and settled a €1.5B exchangeable note with cash.
Key Risks
Three key risks: (1) Ad revenue growth remains subdued as the new stack scales – management expects improvement only in H2. (2) Elevated OpEx from AI compute and marketing may pressure near‑term margins. (3) Gross margin progression can be lumpy quarter‑to‑quarter due to investment timing.
Outlook
Q2 guidance: MAU of 778M, subscribers of 299M (+6M net), revenue of ~€4.8B (+15% YoY), gross margin 33.1%, and operating income of €630M. Full‑year 2026 gross margin, operating margin, and free cash flow are all expected to improve year‑on‑year.
Generated by AI · Q1 2026 results · Not investment advice
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📊 Analysis Methodology

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Financial Model
Projections are built from each company's audited annual financials (Income Statement, Balance Sheet, Cash Flow) over the last 5 fiscal years. Forward assumptions — revenue growth %, EBITDA margin, D&A (USD millions), interest expense, tax rate, and capex — are AI-generated using historical context and refreshed twice a year: after the December results season and after the September/Q4 results season.

DCF Valuation
Fair Value = Σ(FCFt / (1+WACC)t) + Terminal Value. Terminal Value uses the Gordon Growth Model: FCF5 × (1+g) / (WACC−g). Default WACC: 10% (US risk-free ~4.5%, equity risk premium ~5.5%). Default terminal growth: 3% (long-run US nominal GDP proxy).

CAGR Tracker
Expected 5-year CAGR = (DCF Fair Value / Current Price)1/5 − 1. Assumes fair value is reached in exactly 5 years — a mechanical estimate only.

Data Sources & Limitations
Financial statements sourced from public filings. Prices updated daily. Forward assumptions are AI-generated. All monetary values in USD millions. Non-US ADR companies may have currency conversion inaccuracies. Models are point-in-time and do not update intra-quarter or account for M&A, macro shocks, or extraordinary items.

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Investment Risk:
Investing in securities, including US equities and ETFs, involves inherent risks including the potential loss of principal. All investments are subject to market fluctuations, economic conditions, regulatory changes, and other factors that may affect their value. Past performance is not indicative of future results. This analysis is provided for informational and educational purposes only and should not be construed as investment advice under any circumstances.

No Investment Recommendation:
This analysis does not constitute, nor should it be interpreted as, an offer, solicitation, or recommendation to buy, sell, or hold any securities or financial products. Investors are strongly advised to conduct their own independent research and due diligence and to consult with a licensed financial advisor or an SEC-registered investment adviser before making any investment decisions, taking into account their individual financial situation, risk tolerance, and investment objectives.

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Conflict of Interest Disclosure:
The author and/or analyst may currently hold or have previously held positions in the securities discussed. Any such positions are not intended to influence the objectivity or independence of the analysis. This research is produced independently and is not sponsored, endorsed, or commissioned by any company or institution.

Information Sources:
The analysis is based on publicly available information including SEC filings (10-K, 10-Q), annual reports, management commentary, and publicly available financial data. Information is believed to be accurate as of the date of publication but may be subject to change without notice. Readers are encouraged to independently verify all information before acting upon it.

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