Spotify Stock Set To Open At New Record On Strong Q4 Performance: Retail Positions For Further Gains

Spotify Technology S.A. (SPOT) shares are on track to hit a new high on Tuesday after the Stockholm-based music streaming service announced solid fiscal year 2024 fourth-quarter results, thanks to record margins.

The company reported fourth-quarter earnings per share (EPS) of 1.76 euros ($1.82), up from a loss of 0.36 euros for the year-ago quarter. 

Revenue climbed 15.6% year over year (YoY) and 6.4% quarter over quarter (QoQ) to 4.24 billion euros, exceeding the 4.15-billion-euro consensus estimate, according to Yahoo Finance.

The company reported full-year EPS of 5.50 euros, reversing from a loss of 2.73 euros, turning to its full year of profitability. Revenue increased over 18% to 15.67 billion euros.

Among the user metrics, total monthly active users (MAU) climbed 12% YoY and 5% YoY to  675 million. The QoQ net MAU additions of 35 million marked a record and exceeded the guidance by 10 million.

While premium subscribers rose 11% YoY and 4% sequentially to 263 million, ad-supported MAU increased 12% YoY and 6% QoQ to 425 million.

The fourth-quarter gross margin expanded to a record 32.2%, up from 26.7% a year ago and 31.1% in the preceding quarter, as the company maintained a tight lid on costs.

Spotify noted that its free cash flow was at a record 877 million euros in the fourth quarter, bringing the full year’s number to 2.3 billion euros.

“We ended 2024 with strong Q4 performance, as nearly all of our KPIs exceeded guidance and profitability reached record levels,” the company said.

Looking ahead, the company guided to first-quarter revenue of 4.2 billion euros, assuming a 90-basis-point benefit to YoY growth to forex movements and operating income of 548 million euros. 

It expects total MAUs of 678 million and total premium subscribers of 265 million.

On Stocktwits, retail sentiment toward Spotify stock improved further into ‘extremely bullish’ territory (93/100) and the message volume stayed at ‘extremely high’ levels.

Spotify expects its business to be well-positioned to deliver another year of continued growth and improving margins as it reinvests to support its long-term potential.

A retail stock watcher has already begun eyeing the $1,000 level.

Despite stretched valuation in terms of forward P/E, a retailer said he sees “plenty more” upside. 

In premarket trading, Spotify stock climbed 7.37% to $589.53 versus the previous intraday record of $560.36 reached on Friday. It has gained nearly 23% this year, on top of the 138% jump in 2024.

(Note: 1 Euro = $1.04)

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