Spotify’s Revenue is About to Reach $100 Billion

Tech company Spotify has said it forecasts $100 billion in annual revenue over the next 10 years and promised investors higher margins from its podcast and audiobook businesses that it’s currently looking to amplify.

The podcast company held its first private investor day since it listed on the stock market in 2018, and hopes the move will fuel Wall Street despite the global economic slowdown. Read more [The Giant World Bank Cuts Growth Forecast to 2.9%].

To reach this ambitious goal, Spotify will need to nearly double its revenue by nearly 10 times what it was in 2021, which amounted to 11.4 billion dollars, and CEO Daniel Eck stated that the gross profit margin will also jump to 40% with the operating profit margin rising to 20% during the same period.

The company’s shares rose by 6.5% after losing 53% of its market value since the beginning of 2022 until now, meaning that its performance is worse than the S&P 500 index specialized in communication services, which declined by 24% during the same period, knowing that it includes Spotify and other social networks and media. Read more [Spotify Stock Tumbles After Weak User Growth Expectations].

One of the main reasons the company may fail to achieve its long-term goals is its excessive spending to build its podcast and audiobook platforms, but Eck stated that his investments are performing better than expected, with a profit margin of 28.5%, It is currently on track to reach the 30-35% range that was the company’s long-term goal.

The company has committed over $1 billion in investments in podcasts and expects revenue for this segment to increase significantly this year compared to last year’s revenue of just $215 million (€200 million). Read more [Spotify CEO says he’ll buy Arsenal if sale is approved].

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