Latest news with #DanielEk
Globe and Mail
4 minutes ago
- Business
- Globe and Mail
Spotify forecasts profit below estimate as higher payroll taxes outweigh streaming demand
Spotify Technology SA SPOT-N forecast quarterly profit below estimate on Tuesday, as higher taxes related to employee salaries outweigh music streaming demand, sending its high-flying shares down 11 per cent. Investors are closely monitoring the Swedish company's profitability after price hikes and cost-cutting efforts in recent years helped it achieve its first annual profit for 2024. Spotify has also been expanding its library of video content to attract subscribers, a bet that has helped shares more than double in value in the past 12 months. But the higher stock price has led to a jump in payroll taxes linked to employee compensation, hampering profit. Netflix holds talks with Spotify to expand live TV content, report says Such taxes, called social charges, totalled €116-million (US$133.62-million) in the second quarter. That caused Spotify to post a 42-cent-per-share loss, compared with a €1.33 profit a year ago. The company signalled the trend would continue in the third quarter, forecasting an operating income of €485-million euros. That is below analysts' estimate of €562-million, according to data compiled by LSEG. Spotify's revenue forecast of €4.2-billion was also below the estimate of €4.48-billion, while the monthly active users (MAU) projection of 710 million came in line with the estimate. Its prediction for a 5 million increase in premium subscribers to 281 million was above a Visible Alpha estimate of 279 million. The company began investing in video podcasts in 2020 after buying podcast networks Gimlet Media and Anchor FM. Last year, it signed a new multiyear deal with podcaster Joe Rogan. 'We have now added more than 400,000 video podcasts ... more people are consuming video on the platform,' CEO Daniel Ek told Reuters. Spotify's premium subscribers rose 12 per cent to 276 million in the second quarter, beating a Visible Alpha estimate of 273 million. MAU additions of 18 million brought the total to 696 million. Revenue rose 10 per cent to €4.19-billion, but missed the estimate of €4.26-billion due to an unfavourable currency impact of about 440 basis points.
Yahoo
2 hours ago
- Business
- Yahoo
Spotify Crashes 11% After Surprise Loss--But a 2025 Comeback Could Be Brewing
Spotify (NYSE:SPOT) shares fell nearly 11.3% at 11.37am today after the company posted a surprise second-quarter loss, raising fresh questions about the streaming giant's cost structure even as its user growth stayed strong. The company reported a loss of 0.42 per sharemissing Wall Street expectations for a 1.97 profitlargely due to higher-than-expected social charges tied to employee compensation. Revenue rose 10% year-over-year to 4.19 billion ($4.8 billion), but still fell short of the 4.27 billion analysts had forecast. Spotify dropped as much as 11% in intraday trading, its steepest decline since April, despite having gained 57% year-to-date going into the print. Warning! GuruFocus has detected 4 Warning Signs with BX. Still, the growth engine doesn't look broken. Spotify added more paying subscribers than expected, reaching 276 million, while total monthly active users rose to 696 millionboth ahead of consensus. The company expects this momentum to continue, guiding to 281 million paid subscribers and 710 million total users in the third quarter. That said, Q3 revenue and operating income guidance4.2 billion and 485 million, respectivelycame in well below the Street's 4.48 billion and 569.5 million estimates. Management cited FX pressure and changes in revenue mix but emphasized their focus remains on building long-term value rather than optimizing for quarter-to-quarter beats. Under the hood, Spotify is pushing deeper into video and advertising in a bid to reshape its business model. The platform is rolling out more video contentfrom podcasts to live music sessionsand recently launched an AI-powered audio ad tool aimed at lowering production costs for advertisers. While global ads head Lee Brown is exiting for DoorDash (NASDAQ:DASH), the company insists the ad business is being retooled to move faster and deliver more to the bottom line. CEO Daniel Ek reiterated confidence in the strategy, stating, The business is solid, and our model holds up, and pointed to 2025 as a year that could mark a major turning point for Spotify's profitability trajectory. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
2 hours ago
- Business
- Yahoo
Spotify Crashes 11% After Surprise Loss--But a 2025 Comeback Could Be Brewing
Spotify (NYSE:SPOT) shares fell nearly 11.3% at 11.37am today after the company posted a surprise second-quarter loss, raising fresh questions about the streaming giant's cost structure even as its user growth stayed strong. The company reported a loss of 0.42 per sharemissing Wall Street expectations for a 1.97 profitlargely due to higher-than-expected social charges tied to employee compensation. Revenue rose 10% year-over-year to 4.19 billion ($4.8 billion), but still fell short of the 4.27 billion analysts had forecast. Spotify dropped as much as 11% in intraday trading, its steepest decline since April, despite having gained 57% year-to-date going into the print. Warning! GuruFocus has detected 4 Warning Signs with BX. Still, the growth engine doesn't look broken. Spotify added more paying subscribers than expected, reaching 276 million, while total monthly active users rose to 696 millionboth ahead of consensus. The company expects this momentum to continue, guiding to 281 million paid subscribers and 710 million total users in the third quarter. That said, Q3 revenue and operating income guidance4.2 billion and 485 million, respectivelycame in well below the Street's 4.48 billion and 569.5 million estimates. Management cited FX pressure and changes in revenue mix but emphasized their focus remains on building long-term value rather than optimizing for quarter-to-quarter beats. Under the hood, Spotify is pushing deeper into video and advertising in a bid to reshape its business model. The platform is rolling out more video contentfrom podcasts to live music sessionsand recently launched an AI-powered audio ad tool aimed at lowering production costs for advertisers. While global ads head Lee Brown is exiting for DoorDash (NASDAQ:DASH), the company insists the ad business is being retooled to move faster and deliver more to the bottom line. CEO Daniel Ek reiterated confidence in the strategy, stating, The business is solid, and our model holds up, and pointed to 2025 as a year that could mark a major turning point for Spotify's profitability trajectory. This article first appeared on GuruFocus. 擷取數據時發生錯誤 登入存取你的投資組合 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤 擷取數據時發生錯誤
Yahoo
5 hours ago
- Business
- Yahoo
Why Spotify stock is sinking double digits on Q2 earnings
Spotify (SPOT) stock tumbles after the company's second quarter earnings missed estimates. Yahoo Finance Senior Reporter Allie Canal breaks down the details of the earnings print and discusses how some artists are pulling their music from the platform in protest against Spotify CEO Daniel Ek's investments in defense companies. To watch more expert insights and analysis on the latest market action, check out more Market Catalysts here. Spotify shares are under pressure after missing estimates in its second quarter, snapping the recent rally that shot shares to all-time highs. Yahoo Finance senior reporter Allie Canal has been tracking the story, so the shares down 10% right now. 10%. Now heading into this print, we have been up around 120% over the past year, and that comes as this company has really shifted focus. They've pulled back on that aggressive podcast spending that we saw. They refocused their energy on margins. We saw layoffs. There was just a lot of tailwinds for this company, especially on the heels of AI as well. So, the fact that we are seeing this dip today, um is not totally surprising to me given the valuation. However, we did see a disappointing report as well. We had earnings swinging to a loss. We had a weaker forecast for the third quarter, and I think when we look throughout this earnings season, it all has to do with guidance. And if you're a company that's pulling back on guidance, why are you doing that at this point? What reasons are you giving? Uh it was interesting on the call that they were asked a lot about price increases and you're at a time when you have a lot of competitors, YouTube, Apple, aggressively raising prices at a pretty quick rate, whereas Spotify has been a little bit more selective. Now, CEO Daniel Ek, he has maintained that Spotify does not want to consistently raise prices to the point that they're losing customers. They said it's better to have retention than to have to reacquire customers later down the line. So, uh those are all levers that the company could pull. It seems like at this point, they don't want to pull them just yet, and obviously a big focus, as always, is on those gross margins. Spotify laid out a plan in 2022. They want margins over the long term to be between 30 and 35%. And we have reached those levels. We saw record in the fourth quarter, but we did see that dip in Q2, 31.5%, and we are expected to dip further in the current quarter to 31.3%. So, as this company has really ramped up, we finally are profitable. Investors don't want to see any reversal in some of those profits. So that's why you're seeing shares under pressure today. Uh but Wall Street overall looks pretty bullish. JP Morgan reiterating their outperform rating uh saying that looking ahead, it's really a top pick when it comes to AI and again, a lot of those tailwinds that we talk about consistently. Yeah, and as we mentioned, the stock has also done well uh going into this. A headline caught my eye uh to do with Spotify, in part because I am a fan of this band, which is called, wait for it, King Gizzard and the Lizard Wizard. It's an Australian rock band. Um and they are say they're in the process of pulling their music from Spotify. In this case, they say it's because of founder Daniel X's investment in an AI drone company. So it has to do with sort of a war position here. But obviously, this is not the first time or the only time that various artists have pulled their stuff from Spotify. Overall, does it have we seen it have an effect? It hasn't seemed to have an impact on shares. However, we do know that these things are in the headlines. You saw Taylor Swift pull her music. That was over compensation. That was probably a little bit of a bigger deal than this one, probably. Probably a bigger deal than you had during the COVID pandemic, Daniel Ek standing firm in the fact that Joe Rogan and his misinformation claims about COVID-19 that he wasn't going to pull those episodes, and then you had Neil Young and other artists really stand up and pull their music. So this is a company that is very exposed to their artists, and they ultimately need to keep the artists happy, also the labels happy as well. So that is certain points in this company's history, you've seen it struggle with those types of conversations and those types of deals. So this, I think, speaks to the larger issue here when you have a company that is so exposed to artists and you have a leader like Daniel Ek that really doesn't back down when pressured, how does that translate into share price reaction and how do investors react? And we have seen investors look at these issues before and, you know, react and pull their money away. Doesn't seem to be the case this time with shares at record highs, but still something to keep an eye on as we continue to track a lot of these developments and how executive leaders really weigh in on some of these conversations that are in, you know, the zeitgeist right now. Related Videos Market's 'fuel' for further P/E expansion is 'nearing empty' AstraZeneca CFO talks tariffs & shifting focus to US market Nvidia's TSMC order, Eli Lilly & Novo Nordisk sink, JPMorgan & Apple card Royal Caribbean, Merck, FuboTV: Trending Tickers Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
CNA
6 hours ago
- Business
- CNA
Spotify forecasts profit below estimate on high payroll taxes, shares sink
Spotify forecast quarterly profit below estimate on Tuesday, as higher taxes related to employee salaries outweigh music streaming demand, sending its high-flying shares down 11 per cent. Investors are closely monitoring the Swedish company's profitability after price hikes and cost-cutting efforts in recent years helped it achieve its first annual profit for 2024. Spotify has also been expanding its library of video content to attract subscribers, a bet that has helped shares more than double in value in the past 12 months. But the higher stock price has led to a jump in payroll taxes linked to employee compensation, hampering profit. Such taxes, called social charges, totaled 116 million euros ($133.62 million) in the second quarter. That caused Spotify to post a 42-cent-per-share loss, compared with a 1.33-euro profit a year ago. The company signaled the trend would continue in the third quarter, forecasting an operating income of 485 million euros. That is below analysts' estimate of 562 million euros, according to data compiled by LSEG. Spotify's revenue forecast of 4.2 billion euros was also below the estimate of 4.48 billion euros, while the monthly active users (MAU) projection of 710 million came in line with the estimate. Its prediction for a 5 million increase in premium subscribers to 281 million was above a Visible Alpha estimate of 279 million. The company began investing in video podcasts in 2020 after buying podcast networks Gimlet Media and Anchor FM. Last year, it signed a new multi-year deal with podcaster Joe Rogan. "We have now added more than 400,000 video podcasts ... more people are consuming video on the platform," CEO Daniel Ek told Reuters. Spotify's premium subscribers rose 12 per cent to 276 million in the second quarter, beating a Visible Alpha estimate of 273 million. MAU additions of 18 million brought the total to 696 million. Revenue rose 10 per cent to 4.19 billion euros, but missed the estimate of 4.26 billion euros due to an unfavorable currency impact of about 440 basis points.
