Why Spotify Stock Plummeted This Week
Spotify Technology's stock plummeted 14% this week following its Q1 earnings report, despite the company exceeding Wall Street's expectations with 8% sales growth and 54% free cash flow growth. The decline was attributed to slowing premium subscriber growth and disappointing advertising sales.
Spotify Technology's stock fell 14% this week after its Q1 earnings report. The company reported 8% sales growth, 54% free cash flow growth, and 9% premium subscriber growth, exceeding Wall Street's expectations. However, Spotify guided for total premium subscribers to grow only from 293 million to 299 million in Q2, below analysts' consensus of 300 million. Ad-supported revenue declined 5%, despite a 14% growth in ad-supported monthly active users. Spotify's Chief Business Officer Alex Norström stated that the company had completed rebuilding its advertising stack, which should help attract advertisers in the long term. The stock is now trading at 25 times FCF, making it an interesting investment opportunity.
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