🎧 Spotify is plummeting after the results!
Spotify $SPOTshares dropped by more than 11 % after the company failed to meet Wall Street' s expectations and released an outlook that disappointed the markets. Although the number of paying users and overall user base continues to grow, the ad-based business model is limping along. All indications point to a year-over-year decline of 1 %.

📉 Results in a nutshell:
Loss per share: EUR -0.42 (vs. expected EUR +1.90)

Revenue: EUR 4.19 billion (vs. EUR 4.26 billion expected)

Advertising revenue: -1% y/y

Last year's net profit (EUR 225m) turned into a loss of EUR 86m

🔍 CEO did not reassure investors
CEO Daniel Ek was unusually candid during the earnings conference:

"I'm not happy with where we are. But I believe in the ambition we have set for ourselves."

He attributed the service outage to "to problems in execution, not strategy".

The words sounded nice, but the numbers speak for sure; the company is currently underperforming.

📈 Where is Spotify doing well?
The user base continues to grow:
MAU (monthly active users): 696 million (+11%).

Paying users: 276 million (+12%), Q3 outlook: 281 million (+12%).

Strong interest in AI DJ features and audiobook listening growth of 35%

Launch of programmatic advertising solutions and AI tools for creators

Increased share repurchase program by $1 billion

YTD shares still +38%

Spotify stands at a crossroads. It's growing, but with low margins and poorly diversified revenue. If it is to succeed in the long term, it needs to ramp up its advertising business, expand audiobooks and podcasts, while constantly innovating.

What do you think of Spotify? Do you use the company's services?