Spotify heads into this week’s earnings update with a solid tailwind behind it, both in terms of financial performance and share price strength. After rebounding sharply from the recent Trump tariff sell-off, the shares are now trading within touching distance of their highs.
Big Expectations
The market is expecting another strong set of numbers from Spotify on Tuesday. Consensus forecasts point to earnings of $2.49 a share, up 139% on the same period last year, with revenue expected to grow 23% year-on-year to $4.78 billion. Subscriber growth remains healthy, with forecasts suggesting the platform added around 2 million premium subscribers during the quarter, lifting the total to approximately 265 million paying users and 679 million monthly active users overall.
Financially, Spotify has come a long way over the past year. In 2024, the group delivered an operating profit of €1.36 billion and a net profit of €1.14 billion — a sharp improvement on the losses reported in prior years. Free cash flow generation is equally strong, with free cash flow per share up 35% year-on-year. The balance sheet remains in excellent shape, with €7.4 billion of cash and negative net debt of €5.4 billion, giving the company plenty of flexibility as it scales.
Riding Relative Strength
Spotify’s share price has been in a clear uptrend over the past two years, comfortably holding above a steadily rising 200-day moving average. More recently, the shares showed resilience during the Trump tariff-driven sell-off, consolidating within a broad wedge formation before breaking decisively higher. Importantly, they have reclaimed the 50-day moving average and broken out above the wedge, putting them back on the front foot.
Relative to the wider market, the shares have been notably strong. While the S&P 500 remains more than 10% below its highs, Spotify is now trading less than 4% from its peak. The RSI is pushing higher above 60, but has yet to move into overbought territory, suggesting that momentum still has room to run. Volume has remained fairly modest during the bounce, although this could well pick up following this week’s results.
It’s worth noting that earnings can often trigger outsized volatility, particularly when a stock has rallied strongly into the event. As always around earnings season, managing position size and expectations will be key.
SPOT Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Big Expectations
The market is expecting another strong set of numbers from Spotify on Tuesday. Consensus forecasts point to earnings of $2.49 a share, up 139% on the same period last year, with revenue expected to grow 23% year-on-year to $4.78 billion. Subscriber growth remains healthy, with forecasts suggesting the platform added around 2 million premium subscribers during the quarter, lifting the total to approximately 265 million paying users and 679 million monthly active users overall.
Financially, Spotify has come a long way over the past year. In 2024, the group delivered an operating profit of €1.36 billion and a net profit of €1.14 billion — a sharp improvement on the losses reported in prior years. Free cash flow generation is equally strong, with free cash flow per share up 35% year-on-year. The balance sheet remains in excellent shape, with €7.4 billion of cash and negative net debt of €5.4 billion, giving the company plenty of flexibility as it scales.
Riding Relative Strength
Spotify’s share price has been in a clear uptrend over the past two years, comfortably holding above a steadily rising 200-day moving average. More recently, the shares showed resilience during the Trump tariff-driven sell-off, consolidating within a broad wedge formation before breaking decisively higher. Importantly, they have reclaimed the 50-day moving average and broken out above the wedge, putting them back on the front foot.
Relative to the wider market, the shares have been notably strong. While the S&P 500 remains more than 10% below its highs, Spotify is now trading less than 4% from its peak. The RSI is pushing higher above 60, but has yet to move into overbought territory, suggesting that momentum still has room to run. Volume has remained fairly modest during the bounce, although this could well pick up following this week’s results.
It’s worth noting that earnings can often trigger outsized volatility, particularly when a stock has rallied strongly into the event. As always around earnings season, managing position size and expectations will be key.
SPOT Daily Candle Chart
Past performance is not a reliable indicator of future results
Disclaimer: This is for information and learning purposes only. The information provided does not constitute investment advice nor take into account the individual financial circumstances or objectives of any investor. Any information that may be provided relating to past performance is not a reliable indicator of future results or performance. Social media channels are not relevant for UK residents.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 83% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work and whether you can afford to take the high risk of losing your money.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.